Samourai Wallet co-founder sentenced as crypto privacy faces legal crosshairs

The co-founder of privacy-focused cryptocurrency platform Samourai Wallet received a four-year sentence in federal prison for operating an unlicensed money-transmitting business.

What Happened

According to court documents dated November 19, William Hill received a lighter punishment than the five-year maximum term received by his co-founder, Keonne Rodriguez, earlier this year.

Hill and Rodriguez were arrested in July 2024.

Prosecutors cited Hill’s advanced age and a recent autism diagnosis as mitigating factors in the sentencing decision, according to court filings.

Hill and Rodriguez pleaded guilty in July to conspiracy to operate an unlicensed money-transmitting business. The plea agreement resulted in the dismissal of money-laundering charges that had been filed against both defendants.

The U.S. Department of Justice stated that Samourai Wallet facilitated more than $237 million in illegal transactions, including funds connected to darknet markets, cryptocurrency hacks, and other criminal activities.

Prosecutors alleged the co-founders designed and promoted Samourai Wallet’s privacy features, including Whirlpool, a coin-mixing service, and Ricochet, a transaction-obfuscation tool, to attract users seeking to conceal the origins of illicit funds. Court documents described the platform’s services as an “end-to-end laundering pipeline.”

The ruling does not involve traditional custody arrangements, as Samourai Wallet did not maintain control of user funds. Legal observers have indicated the decision may influence pending cases and shape future regulatory frameworks for blockchain privacy technology.

Federal crackdown

The case is part of a broader federal crackdown on crypto mixers believed to be used by threat actors like North Korea’s Lazarus to evade oversight and undermine law enforcement. 

Last year, federal prosecutors won a case against Bitcoin Fog founder Roman Sterlingov for facilitating over $400 million in illegal drug sales.

The DOJ also has a case against Tornado Cash developers Roman Storm and Roman Semenov, while other crypto mixers (i.e., Blender and Sinbad) have been sanctioned.