Authorities shut down Samourai Wallet, arrest founders over money laundering charges in $2 billion DOJ case

by e_cash_top

International authorities collaborated to shut down Samourai Wallet and arrested its two founders on April 24 after the US Department of Justice (DOJ) filed criminal charges against the privacy wallet over allegations of facilitating money laundering.

Samourai’s website currently displays a seizure notice that notes Icelandic law enforcement, Portugal police, IRS, DOJ, FBI, and Europol were involved in the seizures of Samourai’s web servers and domain, with one agent noting that the project is “now closed for business.”

Authorities also issued a seizure warrant for the mobile app on Google Play, noting that the app will “no longer be available to be downloaded” in the US.

Samourai Wallet was among the most popular privacy-focused Bitcoin wallets. Authorities said the mobile app was downloaded more than 100,000 times.

Founders arrested

The DOJ has charged the project’s founders, Keonne Rodriguez and William Lonergan Hill, with conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business.

According to authorities, the two individuals administered and marketed Samourai Wallet, through which they allegedly operated a crypto mixer that handled over $2 billion worth of Bitcoin in illegal transactions. The two are also charged with facilitating over $100 million in money laundering transactions on dark web markets.

Samourai Wallet included two privacy services — a coin mixer called Whirlpool and a “hopping” feature called Ricochet. The operators allegedly earned $3.4 million and $1.1 million in fees from each service, respectively, over several years.

US FBI agents arrested Rodriguez in the US the same day, while Hill was arrested in Portugal and is facing extradition to the US.

Acknowledged illegal activity

Law enforcement alleged Hill and Rodriguez included features “intended to assist individuals engaged in criminal conduct” and openly invited illegal activity.

The DOJ included several social media statements from the founders and their project accounts.

In one statement, Rodriguez invited sanctioned Russian oligarchs to use the service. In another, Hill implied Samourai was unconcerned about Europol’s allegations.

Samourai’s operators allegedly knew the wallet’s applications in dark web markets. Hill described Samourai as having a “focus” on the “black/grey circular economy.” Samourai’s marketing materials similarly mentioned features aimed at “dark/grey market participants” and acknowledged uses in restricted markets and illicit activity.

Past actions

The Department of Justice (DOJ) has taken action against several other coin mixers and their operators, typically on the grounds of money laundering and related charges.

The DOJ currently has cases open against two Tornado Cash operators — one of whom, Roman Sterlingov, has already been convicted in connection to another mixer called Bitcoin Fog. Other past DOJ cases targeted ChipMixer and Helix.

The US Department of the Treasury has separately sanctioned certain coin mixers, including Tornado Cash and related crypto addresses.

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