Feds Bust Privacy-Centric Samourai Wallet Over BTC Money Laundering

The United States has taken down the popular “privacy-focused” Bitcoin wallet Samourai, arresting founders and accusing them of laundering $2 billion in crypto, including dark web funds.

The US Department of Justice has arrested the founders of Samourai Wallet, a popular Bitcoin wallet marketed for its strong privacy features. Keonne Rodriguez and William Lonergan Hill now face charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business.

The seized website of the Samourai Wallet (Screenshot: Hackread.com)

Samourai Wallet, known for its “Whirlpool” and “Ricochet” anonymization tools, had long attracted users seeking enhanced privacy for their Bitcoin transactions. However, the DOJ alleges that this cover of secrecy facilitated a staggering amount of illicit activity.

According to the indictment, Samourai allegedly processed over $2 billion in transactions, with at least $100 million originating from illegal dark web marketplaces like Silk Road and Hydra Market.

“For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering,” stated FBI Assistant Director in Charge James Smith. “The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”

The indictment further accuses Rodriguez and Hill of profiting from these alleged illegal transactions. Samourai allegedly generated millions in fees through its services, raising questions about the company’s true mission.

The takedown of Samourai Wallet has sent shivers down the spines of privacy-focused crypto enthusiasts. Some argue that the ability to conduct anonymous transactions is a core principle of cryptocurrency, essential for protecting users from financial surveillance. Others, however, see the case as validating concerns that criminals can exploit anonymity tools.

The outcome of this case is likely to have a lasting impact on the cryptocurrency industry. It could lead to increased scrutiny of privacy-focused technologies and potentially stricter regulations for cryptocurrency exchanges and wallets.

In the meantime, Samourai Wallet’s website has been seized, and their mobile application is expected to be removed from app stores. Whether Rodriguez and Hill will be found guilty remains to be seen, their arrest goes on to show the the potential consequences for those who operate in the restricted areas of cryptocurrency and anonymity.

1. Crypto tumbler BestMixer.io seized for money laundering
2. New Dark Web Market Styx: Focuses on Money Laundering
3. Android Money Transfer XHelper App was Laundering Money
4. DeepDotWeb admin pleads guilty to money laundering, kickbacks
5. 2 Russians charged in Mt. Gox Bitcoin heist, BTC-e money laundering
6. US Blacklists Tornado Cash, GitHub Removes Co-Founder in Response