The United States Justice Department (DOJ) and other agencies have arrested the co-founders of cryptocurrency mixer Samourai Wallet on charges of money laundering. Samourai Wallet CEO Keonne Rodriguez and chief technology officer William Hill are facing charges of conspiracy to commit money laundering, which carries a maximum prison sentence of 20 years, and conspiracy to operate an unlicensed money transmitting business, which carries a maximum prison sentence of five years.
Rodriguez was arrested in Pennsylvania on April 24, while Hill was arrested the same day in Portugal. The United States is seeking Hill’s extradition. Additionally, the company’s servers and domain were seized in Iceland, and a warrant has been issued to stop downloads of the company’s app from the Google Play Store. The app has been downloaded over 100,000 times.
The investigation involved the U.S. Internal Revenue Service and Federal Bureau of Investigation. According to the DOJ statement, Samourai Wallet offered its Whirlpool crypto mixing service and Ricochet service, which created additional transactions to obscure users’ crypto paths. It is alleged that the company made $4.5 million from fees.
The U.S. government has been taking a more aggressive approach towards crypto mixers. In May 2022, the Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned Blender.io after the Axie Infinity hack. In October 2022, addresses associated with the Tornado Cash mixer were added to OFAC’s list of Specially Designated Nationals, effectively banning U.S. residents from using the service. This decision was upheld in court, and by August 2023, all three co-founders of Tornado Cash were arrested.
In October 2023, the Treasury’s Financial Crimes Enforcement Network proposed designating crypto mixers as a “primary money laundering concern” following the Hamas attack on Israel.
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