U.S. Seeks Five-Year Prison Terms for Samourai Wallet Founders
Prosecutors Allege $237 Million Laundered Through Samourai
In a sentencing memorandum filed Friday, prosecutors requested 60 months’ imprisonment for both men, the statutory maximum under U.S. law for conspiracy to operate an unlicensed money transmitting business. The government said the pair “owned and operated a massive money laundering service” that ran for nahead a decade, facilitating the transfer of funds tied to drug trafficking, cybercrime, and other offenses.
According to the filing, Samourai processed at least $237 million in illicit proceeds between 2015 and April 2024, serving customers involved in darknet marketplaces, fraud schemes, cyber intrusions, and one website distributing illegal material involving minors. During that period, Rodriguez served as chief executive, while Hill oversaw technology operations as chief technical officer.
Prosecutors said Hill admitted in his own sentencing letter that he invited “computer hackers and other criminals” to use the service. Both men were arrested on April 24, 2024.
Investor Takeaway
Charges and Sentencing Details
A grand jury issued a superseding indictment in June, charging Rodriguez and Hill with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. Both pleaded guilty on July 30 to the latter charge under separate plea agreements.
Prosecutors calculated an offense level of 35, equivalent to a guideline range of 168 to 210 months, but said the statutory cap limited sentencing to 60 months. The Probation Office recommended 42 months for each defendant, while defense filings sought lighter terms. Rodriguez asked for a sentence of one year and one day, while Hill requested time served—effectively no further jail time.
Rodriguez is due to be sentenced on Nov. 6, with Hill’s hearing scheduled for Nov. 7. Both remain in federal custody ahead of their sentencing dates.
Context: U.S. Crackdown on Crypto Mixers
The case is part of a broader effort by U.S. prosecutors to tighten control over crypto mixing and privacy services used to obscure transaction flows. In August, a Manhattan jury found Tornado Cash co-founder Roman Storm guilty of operating an unlicensed money transmitting business, though it failed to reach verdicts on separate money laundering and sanctions charges.
Storm’s conviction sparked criticism from privacy advocates and crypto developers who argue that code authors should not be held liable for how others use decentralized software. Organizations including the ETH Foundation and the Solana Policy Institute have contributed to Storm’s legal defense fund.
Storm remains free on bail while pursuing a post-trial motion for acquittal. If unsuccessful, he faces up to five years in prison for the identical charge now confronting Rodriguez and Hill.
Investor Takeaway
Broader Implications
Legal experts say the Samourai and Tornado Cash cases could set precedents for how the U.S. treats privacy tools in decentralized finance. The Justice Department’s recent filings suggest it views developers of such services as responsible for users’ criminal activity if they retain operational control or marketing influence over the platforms.
Samourai, launched in 2015, marketed itself as a privacy-first BTC wallet offering coin-mixing and transaction obfuscation tools. The project attracted a devoted user base before being shut down following the founders’ arrests. Prosecutors allege that, despite warnings, the founders continued promoting features intended to “hide the trail” of illegal proceeds.
The sentencing hearings next week will test whether the court adopts the prosecution’s full recommendation or leans toward the lower range advised by the Probation Office. A final ruling will add to the growing body of case law shaping how privacy and compliance intersect in the digital asset sector.
