Samourai Wallet Co-Founders Charged with Money Laundering and Operating an Unlicensed Business
Two of the co-founders of Samourai Wallet, a crypto mining service based in the United States, are accused by prosecutors of facilitating illegal transactions totaling approximately $2 billion.
Each co-founder is accused of money laundering and operating an unlicensed money transmitting business. The most severe penalty for money laundering carries a maximum prison term of 20 years.
Samourai Wallet Allegedly a ‘Safe Haven’ for Criminals
The U.S. Attorney’s Office for the Southern District of New York announced in a press release on April 24, 2024, that the co-founders and executives of Samourai Wallet, Keonne Rodriguez (CEO) and William Lonergan Hill (CTO), were taken into custody.
Rodrguez was arrested in the United States, whereas Hill was taken into custody in Portugal; the communique announced that the U.S. intends to request his extradition.
Authorities took control of Samourai’s website and servers, preventing users in the US from accessing the app for download. This action followed the issuance of a seizure warrant on Google Play Store. Prior to this, the Samourai mobile application had garnered over 100,000 downloads.
From 2015 to 2024, Rodriguez and Hill were in charge of creating and managing Samourai, a platform that included two distinct features: Whirlpool, a cryptocurrency blender, and Ricochet, a hopping service.
According to the prosecution’s argument, these two features functioned as disguises, making it harder to trace the illegal origins of the funds being laundered. The defendants are accused of deliberately using Samourari to process a significant amount of criminal proceeds, with the intention of hiding their illicit nature.
As a financial analyst, I’ve come across reports suggesting that Samourai allegedly orchestrated over $2 billion in illicit transactions and washed nearly $100 million in criminal proceeds from the dark web using Whirlpool and Ricochet as alleged tools for money laundering.
As a crypto investor, I’ve come across some disturbing allegations regarding Rodriguez and Hill. They reportedly encouraged and extended invitations to users via tweets and private messages to launder ill-gotten gains using Samourai Wallet’s mixing services, Whirlpool and Ricochet. The execs raked in a substantial fee of $4.5 million from these transactions as disclosed in the press release.
US Authorities Intensify Crackdown on Crypto Mixers
Rodriguez and Hill face separate charges, each with one count for conspiring to commit money laundering and another count for operating an unlicensed money-transmitting business without permission. The potential penalties for these offenses are significant: a maximum prison term of 20 years for the money laundering conspiracy charge, and up to five years for the unlicensed money-transmission charge.
According to a statement from James Smith, the FBI Assistant Director in Charge:
Criminal hackers employ technology to bypass law enforcement surveillance and establish favorable conditions for illegal activities. For nearly a decade, Keonne Rodriguez and William Hill are accused of managing a mobile cryptocurrency blender, offering other criminals a discreet platform to swap ill-gotten gains.
As a crypto investor, I’ve noticed an uptick in regulatory action against cryptocurrency mixers. The US government alleges that these services are favored by nefarious groups like Lazarus, who use them to obscure the origins of illegally gained funds through money laundering activities.
In March, the operator of Bitcoin Fog, a crypto mixing service, named Roman Sterlingov, faced legal defeat at the hands of federal prosecutors. The accusations against him involved money laundering activities.
Cryptocurrency mixing services like Tornado Cash and Blender.io have faced scrutiny from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). OFAC has imposed sanctions on these platforms, with executives from Tornado Cash allegedly involved in laundering approximately $1 billion worth of cryptocurrencies.
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2024-04-29 07:24