Keonne Rodriguez, the CEO of Samourai Wallet, a prominent cryptocurrency mixing service, has been sentenced to five years in prison by U.S. District Judge Denise Cote of the Southern District of New York. This sentence, the statutory maximum, comes after prosecutors alleged the service laundered $237 million in illicit funds. Fellow developer William Lonergan Hill, the company’s CTO, is scheduled for sentencing on Friday. Rodriguez and Hill were initially arrested in April 2024 and faced charges of conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. After a year of legal proceedings, both pled guilty to the lesser charge of operating an unlicensed money transmitting business, in exchange for the more severe money laundering conspiracy charge — which carries a maximum of 20 years — being dropped.

Prosecutors detailed how Samourai Wallet’s crypto mixing services, specifically Whirlpool and Ricochet, were utilized to obscure the origins of criminal proceeds. These illicit funds reportedly stemmed from various illegal activities, including drug trafficking, darknet marketplaces, cyber intrusions, fraud schemes, and even murder-for-hire operations. Whirlpool operated by coordinating batches of Bitcoin exchanges among users, while Ricochet complicated fund tracing by introducing multiple intermediate transactions, often referred to as “hops.” From Ricochet's launch in 2017 and Whirlpool's inception in 2019, more than 80,000 Bitcoin, valued at over $2 billion at the time, passed through these services, generating approximately $6 million in fees.

Court documents presented compelling evidence that Rodriguez and Hill actively encouraged the criminal use of Samourai Wallet. In WhatsApp messages, Rodriguez reportedly described the service as “money laundering for bitcoin.” Hill, on the other hand, promoted Whirlpool on Dread, a darknet forum, advertising it as a tool to make illicit funds “untraceable.” Furthermore, following a social media hack in 2020, the duo tracked the stolen funds in real time and publicly urged the hackers to launder their proceeds through Samourai Wallet. This case has been framed by the Department of Justice as a continuation of a broader crackdown on cryptocurrency mixing services, following the August conviction of Tornado Cash co-founder Roman Storm for operating an unlicensed money transmitting business. Special agents from the IRS-Criminal Investigation and the FBI underscored that Rodriguez and Hill not only facilitated but also actively promoted the laundering of illicit proceeds, thereby eroding public trust in digital assets.

Rodriguez, 35, had sought a more lenient sentence of one year and a day, while Hill had requested time served. However, prosecutors advocated for the full five-year statutory maximum for both defendants, which Judge Cote ultimately imposed on Rodriguez. Hill’s sentencing is awaited on Friday at 11 a.m. ET, concluding a significant legal proceeding in the realm of cryptocurrency and financial crime.