Samourai Wallet Co-founders Make U-turn, Will Now Plead Guilty to Crypto Mixing Charges
Samourai Wallet Co-Founders Reverse Course in Crypto Privacy Case, Change Pleas As Similar Crypto Mixing Tornado Cash Trial Heats Up
In a dramatic turn of events, the Co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, have suggested they will plead guilty to charges related to their cryptocurrency mixing protocol. This coming guilty plea is a reversal from their original not-guilty pleas they told the court earlier this year.
The two co-founders filed notices in a New York federal court on Tuesday, announcing their intention to change their pleas. The hearings will hold on Wednesday morning with U.S. District Judge Denise Coteto to review the plea changes formally.
The Co-Founders Under Investigation for Alleged AML Violations
Rodriguez, the CEO of Samourai, and Hill, the company’s Chief Technology Officer, were arrested in April 2024 and charged with conspiracy to commit money laundering and operating an unlicensed crypto mixer protocol. The charges, if proved, could mean a potential sentence of up to 25 years in federal prison.
The prosecutors in the case accused the pair of designing Samourai Wallet to include features like Whirlpool, a crypto mixing service that works by obfuscating the true origins of funds. According to court documents, Samourai was used to process over $2 billion in unlawful transactions, including about $100 million linked to dark web marketplaces such as the infamous Silk Road.
In April, Rodriguez and Hill moved to dismiss the case, citing an internal Department of Justice memo that discouraged prosecution for “unwitting violations” of financial regulations related to crypto mixers. They also claimed that prosecutors ignored earlier legal advice suggesting Samourai did not require a money transmission license.
This change in plea follows months of legal loopbacks. Despite their best efforts, their legal strategy has not worked out. The DOJ maintained that the pair had actively and intentionally promoted the use of Samourai for laundering illegal funds and knowingly built tools to help facilitate the activity.
Samourai Wallet Case is Not Isolated
The Samourai case is unfolding at the same time as another high-profile crypto trial in the same U.S. District Court for the Southern District of New York in Manhattan.
Tornado Cash co-developer Roman Storm is facing charges similar to those served against Rodriguez and Hill. His trial, scheduled earlier this month, focuses on whether privacy tools like Tornado Cash authorities can criminalized if used by bad actors for illegal activities. Storm could face up to 45 years in prison if convicted.
