Key takeaways:
- On suspicion of money laundering, the US DOJ and other authorities have detained the co-founders of crypto mixer Samourai Wallet.
- Hill was detained in Portugal the same day as Rodriguez was taken into custody in the early hours of April 24 in Pennsylvania.
The two co-founders of the cryptocurrency mixer Samourai Wallet have been taken into custody by the US Department of Justice (DOJ) and other authorities on suspicion of money laundering.
A maximum sentence of twenty years in prison is imposed on one count of conspiring to launder money, and a maximum sentence of five years in prison is imposed on one count of conspiring to run an unlicensed money transmission business, which is against Samourai Wallet CEO Keonne Rodriguez and CTO William Hill.
In the early hours of April 24, Rodriguez was taken into custody in Pennsylvania, and on the same day, Hill was taken into custody in Portugal. US Attorney’s Office for the District of Columbia said that the US will request Hill’s extradition.
In addition, the company’s domain and servers were taken into custody in Iceland, and a warrant has been issued to prevent the company’s software from being downloaded from the Google Play Store. Over 100,000 downloads have been made of the app.
The Federal Bureau of Investigation and the US Internal Revenue Service were also involved in the probe. The DOJ statement claims that Samourai Wallet:
“Executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets, such as Silk Road and Hydra Market; a web-server intrusion; a spearphishing scheme; and schemes to defraud multiple decentralized finance protocols.”
Samourai Wallet provided its Ricochet and Whirlpool cryptocurrency-mixing services, which resulted in extraneous transactions that further complicated customers’ crypto routes. The fees are said to have brought in $4.5M.
The US government has become more assertive regarding cryptocurrency mixers. In May 2022, Blender[.]io was sanctioned by the Treasury Department’s Office of Foreign Asset Control (OFAC) following the Axie Infinity breach.
Effectively prohibiting US citizens from utilizing the service, the OFAC added addresses connected to the Tornado Cash mixer to its list of Specially Designated Nationals in October 2022. Despite a legal challenge, that ruling stood. As of August 2023, all three of Tornado Cash’s co-founders were under arrest.
With the Hamas attack on Israel, the Treasury’s Financial Crimes Enforcement Network suggested in October 2023 that cryptocurrency mixers be classified as a “primary money-laundering concern.”
