The co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, are ready to swap their not-guilty pleas for a guilty one. Yup, you read that right. The duo has filed in New York federal court to change their pleas ahead of their scheduled court appearance on Wednesday morning.
Back in April 2024, they both pleaded not guilty to running an alleged unlicensed money-transmitting business. According to prosecutors, their crypto mixing protocol processed a mind-blowing $2 billion worth of illegal transactions. Some of that? Tied to shady online marketplaces like Silk Road. Not the best company to be in, huh?
Rodriguez, Samourai’s CEO, and Hill, the CTO, were slapped with conspiracy to commit money laundering charges. That carries a pretty hefty maximum prison sentence of 20 years. Oh, and if the charges for running an unlicensed money-transmitting business stick, they’re looking at another 5 years on top of that. That means up to 25 years of prison time.
Crypto Mixing Services Under Fire as Samourai Wallet Founders Face Charges
On Tuesday, the court confirmed that a hearing would take place Wednesday morning to discuss the plea changes, but no word yet on how this might affect their sentences. Their trial was originally set to kick off on Nov. 3, but now it seems like that could be a whole new ball game.
But this plot twist doesn’t come out of nowhere. Just a few months ago, the Samourai founders tried to dismiss the case by pointing to a memo from the Deputy Attorney General saying crypto mixers wouldn't be prosecuted for “unwitting violations of regulations.” They even argued that the DOJ suppressed advice that they didn’t need a money-transmitting license months before charges were filed. Spoiler: that didn’t work.
Samourai Wallet, if you’re unfamiliar, works by mixing users’ crypto funds, making it harder to trace where the money originally came from. While that's great for privacy, it doesn’t look so great when it’s used to hide illicit activities.
And it’s not just Samourai in hot water. Another crypto mixer, Tornado Cash, is also making waves. One of its creators, Roman Storm, is currently in court on charges of conspiracy to commit money laundering and sanctions violations. If Storm is convicted, he’s facing a whopping 45 years behind bars. Imagine the precedent that could set for open-source privacy tools... but that’s a whole other can of worms.
As for Rodriguez and Hill, their guilty pleas are the latest chapter in the growing scrutiny of crypto mixing services. Whether it’s Tornado Cash or Samourai Wallet, the future of decentralized finance is looking pretty uncertain as the legal hammer continues to fall. Let's see how this all plays out.
Kristian Koch
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