Keonne Rodriguez and William Lonergan Hill have been formally accused by federal authorities. Rodriguez and Hill, the masterminds of the Bitcoin privacy wallet and mixer, Samourai Wallet, are facing serious accusations of conspiracy related to money laundering and the operation of an unauthorized money transmission business.
The Department of Justice (DOJ) made these charges public on Wednesday following an extensive examination of the duo's dealings and the broader operations of Samourai Wallet.
TLDR
- The founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, are facing charges of conspiracy for money laundering and operating a money transmitting business without proper authorization.
- Allegations against Samourai Wallet suggest it played a role in laundering over $100 million in transactions tied to illegal activities on the dark web, as well as over $2 billion in illicit dealings from 2015 to the present day.
- Rodriguez and Hill reportedly made a fortune, around $4.5 million, from fees charged for their secretive services, even marketing the wallet specifically to those involved in the underground or unregulated market.
- The authorities have taken control over the Samourai Wallet website and have issued a warrant to seize its mobile app from the Google Play Store.
- Right after news of the arrests was made public, the crypto world saw Bitcoin, Ether, and other major digital currencies suffer a brief downturn, with Bitcoin falling by 3.6% and Ether losing 2.51% of its value.
The DOJ claims the Samourai Wallet facilitated over $100 million in laundering transactions from dark web markets and executed more than $2 billion in unauthorized transactions since 2015.
This $2 billion figure has been calculated by converting Bitcoin's price at the time of each unlawful transaction into U.S. dollars.
It's alleged that Rodriguez, at 35, and Hill, at 65, amassed roughly $4.5 million from their illicit operations. They stand accused of creating and promoting a platform that enabled criminals to perform extensive laundering of illicit money.
If found guilty, the accused face up to 20 years for money laundering conspiracy and an additional five years for unlicensed money transmission business conspiracy.
The DOJ’s disclosure includes tweets and private communications in which Rodriguez and Hill apparently promoted and encouraged the use of their services for criminal money laundering.
Reportedly, the pair also sought financial backing by highlighting that their services catered to 'dark/grey market participants', explicitly targeting markets dealing with online gaming and asset shielding.
In a coordinated legal effort, Rodriguez was taken into custody in Pennsylvania on Wednesday morning, while Hill, the Chief Technology Officer of Samourai Wallet, was captured in Portugal.
The U.S. has reportedly initiated proceedings to have Hill extradited for trial. Meanwhile, the Samourai Wallet website, hosted in Iceland, has been seized, and the mobile app has been targeted with a seizure mandate from the Google Play Store.
The arrests sent ripples through the cryptocurrency trading world, as evidenced by the brief downturn for Bitcoin, Ether, and other significant digital currencies following the news.
Within an hour of the DOJ's disclosure, Bitcoin's value fell 3.6%, briefly dipping below critical levels to $63,710 before recovering slightly to $64,546. Ether, known as the second-largest cryptocurrency by market capitalization, saw a 2.51% drop within the same timeframe, eventually declining further to $3,158.
The dramatic drop in two of the biggest cryptocurrencies led to a massive sell-off, with Bitcoin experiencing $33.08 million in long positions being liquidated and Ether seeing $29.88 million worth of liquidations during a 12-hour window.
Across the broader crypto sphere, about $23 million in long positions were wiped out. according to CoinGlass data .
As the legal proceedings against Rodriguez and Hill unfold, those invested in the cryptocurrency scene are keenly observing how these developments may impact privacy-centric crypto services and broader regulatory trends within the digital asset realm.
