The co-founders of Samourai Wallet have been arrested on serious federal charges, escalating the United States government’s crackdown on illicit financial activities associated with cryptocurrency operations.
The arrests are part of a broader investigation involving multiple U.S. agencies.
Charges and Legal Proceedings
Samourai Wallet’s CEO Keonne Rodriguez and Chief Technology Officer William Hill face charges of money laundering and operating an unlicensed money transmitting business.
Rodriguez was arrested in Pennsylvania, while Hill was detained in Portugal, with the U.S. seeking his extradition.
If convicted, Rodriguez and Hill could face up to 20 years in prison for the money laundering charges and up to five years for the charges related to operating an unlicensed business.
The U.S. authorities have also seized the company’s servers in Iceland and halted the app’s distribution via the Google Play Store.
The app, which has been downloaded over 100,000 times, offers services designed to obscure the source of cryptocurrency transactions, complicating tracking efforts by authorities.
Background of Illegal Activities
According to the Department of Justice, Samourai Wallet executed transactions exceeding $2 billion that violated U.S. laws and facilitated over $100 million in transactions linked to money laundering activities.
These transactions reportedly supported illicit activities from dark web markets and various fraud schemes.
The case highlights the U.S. government’s intensified measures against cryptocurrency mixers, which are often used to launder proceeds from illegal activities.
Past actions include sanctions and legal challenges against other crypto mixers like Blender.io and Tornado Cash, with the latter’s co-founders also facing legal actions by U.S. authorities.
The U.S. Treasury’s Financial Crimes Enforcement Network is also considering designating crypto mixers as a primary concern in money laundering, underscoring the increasing regulatory scrutiny on mechanisms that can be used to disguise illegal financial flows.
This legal action against Samourai Wallet’s founders is a clear signal of the stringent measures the U.S. government is willing to enforce to regulate the crypto industry, especially components that might facilitate financial crimes.
