Key Takeaways
- U.S. prosecutors seek the full 5-year sentence for Samourai Wallet’s founders.
- Authorities allege the app laundered $237M in illicit funds.
- Developers claim they built the wallet to protect digital privacy, not aid criminals.
The creators of Samourai Wallet, a popular Bitcoin privacy application, are facing the possibility of maximum prison sentences after pleading guilty to charges related to operating an unlicensed money-transmitting business.
U.S. prosecutors have requested the statutory maximum of five years in prison for both Keonne Rodriguez and William Lonergan Hill, arguing that the developers knowingly built and marketed their privacy tools to help criminals launder hundreds of millions of dollars in illicit funds.
According to the government’s sentencing memorandum filed in the Southern District of New York, prosecutors claim that Samourai Wallet processed at least $237 million connected to drug trafficking, darknet markets, cyberattacks, fraud schemes, and even child exploitation sites.
They allege that the wallet’s privacy features—particularly Whirlpool and Ricochet—were deliberately designed to conceal the origins of illicit transactions.
The defendants “repeatedly solicited, encouraged, and invited criminals” to use their platform, the memorandum states. Prosecutors described Rodriguez and Hill as “not mere bystanders,” claiming that their marketing specifically targeted users seeking to hide illegal proceeds.
Samourai Wallet, launched in 2015, was designed to enhance financial privacy for Bitcoin users by breaking transaction trails on the blockchain. It was a non-custodial wallet, meaning the developers never held or controlled users’ funds—a fact central to their defense.
Hill and Rodriguez argue that their intent was to promote digital privacy, not facilitate crime.
In a letter to the court, Hill wrote, “I co-founded a software company to develop tools that could provide the anonymity necessary to make Bitcoin work as intended.”
He added that he believed deeply “in the idea of liberty and freedom from government overreach,” saying that his goal was to make Bitcoin function as “digital cash” that ensured personal independence.
Rodriguez echoed those sentiments in his own defense letter, stating that they had sought and followed legal advice. “We had legal counsel who told us our operations were compliant,” he wrote, emphasizing that they never took custody of user funds and believed they were acting within the law.
The defense also cited support from Professor David L. Yermack of New York University, who framed the project within the cypherpunk tradition.
Yermack described Samourai as part of a movement that viewed cryptography as a way to protect individual freedom and resist government surveillance.
Prosecutors, however, paint a far different picture. They allege that Rodriguez and Hill marketed Samourai directly to darknet users and referred to Bitcoin as “black market money.”
Citing private chats and forum posts, the government says the developers described Samourai as a “laundry service” for criminals and bragged that its features made it “virtually impossible to link inputs and outputs.”
The memorandum even references specific messages, including a 2018 WhatsApp chat in which Rodriguez allegedly called mixing “money laundering for Bitcoin.” Prosecutors also claim Hill promoted Samourai on dark web forums as a tool for “cleaning dirty Bitcoin.”
Authorities say that between 2015 and 2024, the service handled over $2 billion in transactions, including at least $237 million in confirmed criminal proceeds.
They further allege that the developers collected about $6.3 million in fees—roughly 246.3 BTC, now worth around $26.9 million due to bitcoin’s price appreciation.
A controversial element of the case concerns data collected from Samourai users. Prosecutors claim that despite its privacy-focused marketing, the developers retained technical data that allowed them to “demix” or trace some transactions.
Hill disputes this characterization, explaining that the data—known as “XPUB” information—was needed to calculate wallet balances for users who didn’t run their own Bitcoin node.
He clarified that only around 20% of users were affected, arguing that it was a necessary design choice, not evidence of surveillance or deception.
Privacy advocates argue that such prosecutions risk criminalizing innovation and coding itself. Math is not a crime, and privacy should not be either, reflecting a growing worry within the digital asset community.
While the probation office recommended a 42-month sentence, prosecutors are pressing for the full five years—the maximum allowed under U.S. law for conspiracy to operate an unlicensed money-transmitting business.
