3 hours ago
525
Samourai wallet developers, Keonne Rodriguez and William Lonergan Hill, are currently attempting to resist US prosecutors who have been clamoring for a five-year sentence as punishment for their misdeeds in a case that has been tagged one of the government’s most aggressive prosecutions of crypto developers to date.
The US government wants a statutory maximum five-year prison sentence for both founders, accusing them of deliberately building and marketing a crypto mixing service with the intent of making it a haven for criminals who wished to launder hundreds of millions of dollars in illicit proceeds.
Why US prosecutors are pushing for maximum sentence for the devs
According to a sentencing memorandum from Friday, prosecutors accused the developers of deliberately soliciting, encouraging, and inviting criminals to utilize the platform’s features if they wanted to hide their money trail. The filing also revealed a WhatsApp chat from 2018 in which Rodriguez reportedly defined mixing as “money laundering for BITCOIN.”
The defendants allegedly raked in over $6.3 million in fees from the illicit Samourai transactions that followed, worth roughly $26.9 million today due to Bitcoin’s appreciation, per the filing.
Rodriguez and Hill pleaded guilty in July to conspiracy charges and admitted that criminals were indeed using Samourai to launder drug trafficking and hacking proceeds.
In exchange for the confession, prosecutors dropped three more serious charges against them, including conspiracy to commit money laundering, conspiracy to commit sanctions violations, and federal licensing violations.
Rodriguez’s sentencing is scheduled for November 6 at 11:00 a.m. ET, while Hill’s will follow the next day. The prosecutors want the full five-year term, which is the maximum allowed under 18 U.S.C. § 371, which covers conspiracy to operate an unlicensed money-transmitting business.
Misery piles for mixer developers
The case against the Samourai wallet founders bears some similarities to the one involving Tornado Cash developer Roman Storm, who was convicted in August of conspiracy to operate an unlicensed money transmitter.
The US Treasury Department sanctioned the mixer in August 2022, though those sanctions were later deemed unlawful and lifted, while the criminal cases proceeded.
Last month, Storm expressed a desire to wipe his slate clean when he reportedly asked a federal judge to toss his charges, which come with a maximum prison sentence of five years.
Unfortunately, jurors have remained deadlocked on the most severe charges, conspiracy to launder money and to evade sanctions, charges that carry a combined maximum sentence of 40 years in prison, and prosecutors have yet to decide whether to re-try Storm on both counts.
Storm’s attorneys want him acquitted on all three counts, arguing that the evidence from his three-week trial did not prove he had acted with criminal intent and that the case should never have been tried in New York.
If successful, it wouldn’t be the first time that Storm’s lead attorney has convinced a judge to vacate a jury’s ruling in a criminal trial.
Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
English (US)