Samourai Founders Arrested for Laundering Billions in Cryptocurrency

Two executives of Samourai, a cryptocurrency mixing service, have been apprehended and indicted for money laundering and operating an unlawful money transmitting company.

The US Attorney’s Office for the Southern District of New York has accused Keonne Rodriguez and William Lonergan Hill, the CEO and CTO of Samourai, respectively, with conspiring to commit money laundering and operate an unlicensed money transmitting business.

Lacuna in Compliance

The accusations stem from Samourai’s operation of an illegal cryptocurrency mixing service that facilitated over $2 billion in illicit transactions, including $100 million in money laundering from illegal dark web markets like Silk Road and Hydra Market.

Samourai’s Illicit Functions

Samourai’s “Whirlpool” service obscures the origin of illicit funds by combining cryptocurrency exchanges, while “Ricochet” introduces unnecessary intermediate transactions, making it more challenging for law enforcement to trace criminal proceeds.

Evidence of Criminal Intent

Authorities have presented evidence suggesting Rodriguez and Hill’s awareness of the service’s illicit usage. Samourai’s Twitter account explicitly invited users to launder criminal proceeds, and marketing materials highlighted the service’s appeal to individuals seeking to evade financial regulations.

Significance and Impact

The investigation has led to the seizure of Samourai’s web servers and domain, as well as the mobile application from the Google Play Store in the US. This move aims to dismantle the platform and prevent future illicit activities.

Confronting Financial Crime

“We will relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct,” said US Attorney Damian Williams. This case demonstrates the collaborative efforts of law enforcement agencies to combat money laundering and other financial crimes facilitated by cryptocurrency.

Magnitude of the Allegations

Rodriguez faces a maximum sentence of 20 years for conspiracy to commit money laundering and 5 years for operating an unlicensed money transmitting business, while Hill faces similar charges. However, it’s important to note that the defendants are presumed innocent until proven guilty.