Samourai Wallet Developer Sentenced to Five Years in Federal Prison

TLDR

• Samourai Wallet developer sentenced to 5 years for running an unlicensed crypto mixing operation.
• Rodriguez and Hill were charged with laundering over $237M in illicit cryptocurrency transactions.
• Prosecutors linked the wallet to proceeds from darknet markets, fraud, and child exploitation crimes.
• Developers pleaded guilty in exchange for dropping the more serious money laundering charge.
• Co-developer William Hill to be sentenced separately as the outcome remains pending in federal court.

Keonne Rodriguez, one of the developers behind Samourai Wallet, received a five-year federal prison sentence on Thursday. U.S. District Judge Denise Cote issued the decision during a one-hour hearing at the Manhattan federal courthouse. Rodriguez faced charges for operating a crypto mixing service linked to criminal transactions totaling over $237 million.

Federal Prosecutors Tied Wallet to Serious Criminal Proceeds

According to court records, prosecutors connected the wallet’s services to money derived from illegal sources. The funds allegedly came from darknet marketplaces, drug trafficking, cyber intrusions, fraud operations, and a child pornography website. Prosecutors described the activities as intentional and unlawful.

Rodriguez and fellow developer William Lonergan Hill were arrested in April. Both faced two charges: conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. In July, they reached a plea deal with prosecutors. Under the agreement, both developers pleaded guilty to the unlicensed transmitting charge. The money laundering conspiracy charge, which carried a 20-year maximum sentence, was dropped as part of the deal.

Judge Imposes Maximum Statutory Sentence Following Prosecutors’ Request

On October 31, prosecutors submitted a sentencing memo asking the court to apply the full five-year penalty. They argued that Rodriguez knowingly enabled the laundering of high-risk criminal proceeds. Rodriguez’s legal team requested a shorter sentence of one year and one day. Judge Cote ultimately ruled in favor of the prosecution’s request.

William Lonergan Hill, Rodriguez’s co-defendant, is scheduled to be sentenced on Friday at 11 a.m. by the same judge. The outcome of his sentencing remains to be announced. Rodriguez’s plea came during Roman Storm’s trial, another developer charged in a related case. A jury found Storm guilty of operating an unlicensed money transmitting business. The jury could not reach a verdict on two other counts. Prosecutors have not confirmed whether those charges will be retried.

The post Samourai Wallet Developer Sentenced to Five Years in Federal Prison appeared first on Blockonomi.