Most recently, the US Department of Justice took custody of the two founders of Samourai Wallet.
A $100 million or so worth of money laundering was alleged against them.
The defendants were charged with using their crypto-mixing services for illegal purposes by the prosecution.
Federal prosecutors have accused Keonne Rodriguez and William Lonergan Hill, the founders of Samourai Wallet, of conspiring to launder money. This action is in keeping with the US government’s continuous efforts to punish cryptocurrency technologies that mix funds.
In addition, they regard it as an action taken by foreign players and illegal organizations to hide money transfers. However, the Department of Justice (DoJ) has drawn criticism by bringing charges against the founders of Samourai Wallet. Ki Young Ju, the CEO and founder of CryptoQuant, supported Samourai Wallet and its founders.
Samourai Wallet is backed by CryptoQuant CEO
“The US DOJ has arrested pioneers in #Bitcoin privacy technology,” the CEO of CryptoQuant stated in a post on X. Because it improves anonymity, he pointed out that crypto mixing in and of itself is not illegal. Ju said, “One of the fundamental principles of Bitcoin is privacy. Mixing by itself is not unlawful. To protect customer privacy, even cryptocurrency exchanges utilize mixing.
Moreover, Ju emphasized that a feature’s legality or illegality depends on its use and intent. He made the analogy between using a knife—which is both legal and illegal—and the Samourai wallet case. As the founder of CryptoQuant pointed out, penalizing the person who invented the weapon rather than the person who wields it is like penalizing the person who invented the weapon.
However, the announcement disclosed that Rodriguez and Hill are charged with creating, marketing, and running a mixing business that helped facilitate money laundering transactions totalling more than $100 million from dark web markets. Samourai Wallet is said to have made about $2 billion in illegal transactions possible since its launch in 2015.
William Lonergan Hill and Keonne Rodriguez Faced Additional Charges
Additionally, the prosecution stated that the two received fees totalling around $4.5 million for their Samourai Wallet mixing services. These services charged different pool fees for various features. They are facing charges of conspiring to launder money and conspiring to operate an unauthorized money transmission business, which have corresponding maximum punishments of 20 years and five years.
Furthermore, Rodriguez has been detained and is anticipated to be charged in Pennsylvania. As for Hill, he was arrested in Portugal while working as the CTO of Samourai Wallet, and he could be extradited to the United States. The Samourai Wallet mobile application from the Google Play Store has also been seized by officials, who have also taken control of the website, which is located in Iceland.
Using evidence from tweets and private chats, the Department of Justice (DOJ) claims that Rodriguez and Hill urged users to use their mixer to launder unlawful proceeds. Over 100,000 downloads have been made of the smartphone app.
The founders allegedly targeted black and gray markets, especially during and after the COVID-19 epidemic, with an emphasis on censorship resistance and the black/grey circular economy, with no prospect of widespread acceptance.
Using marketing brochures that listed “Restricted Markets,” they allegedly pitched to “dark/gray market participants” in an attempt to find investors. The target demographics for this were online gambling and asset protection.
