Samourai Wallet Co-Founder Gets Five-Year Prison Term
Rodriguez Sentenced for Operating Crypto Mixing Service
Keonne Rodriguez, co-founder of Samourai Wallet, was sentenced to five years in prison on Thursday by a U.S. federal judge for operating a crypto mixing platform prosecutors said assisted launder millions of dollars in illicit funds. The sentence, handed down in the Southern District of New York, matched the maximum term sought by prosecutors. Rodriguez was also ordered to pay a $250,000 fine, according to Inner City Press.
Prosecutors said Rodriguez, who served as chief executive, and co-founder William Lonergan Hill, who was the firm’s chief technology officer, developed the wallet’s “Whirlpool” feature to conceal the origin of cryptocurrency transactions. They argued that the mixer was designed to allow users to “engage in criminal conduct” and that both founders publicly encouraged others to move illegal proceeds through the platform.
Investor Takeaway
Guilty Pleas and Courtroom Remarks
Rodriguez and Hill pleaded guilty in July later than initially contesting the charges when they were first brought last year. During Thursday’s hearing, Rodriguez told the court he was sorry and said he would not break the law again. His attorney described him as “a warm family man” living in a $250,000 home in Pennsylvania, contrasting him with former FTX chief executive Sam Bankman-Fried, who lived in a luxury penthouse in the Bahamas during the height of his platform’s operations.
Bankman-Fried was convicted in November 2023 on seven criminal counts related to fraud and sentenced to 25 years in prison. The comparison underscored the difference between cases involving financial fraud and those testing the limits of privacy technologies in crypto.
Mixing Services Face Legal Heat
Crypto mixing services, which combine multiple transactions to obscure their sources, have drawn increasing scrutiny from U.S. regulators and law enforcement. Authorities say such tools are often used to hide proceeds from ransomware, darknet markets, and sanctions evasion. Privacy advocates argue that mixers also provide legitimate protections for user anonymity.
In a separate case in August, Tornado Cash developer Roman Storm was found guilty on one money-transmitting charge, though a jury could not reach a verdict on counts of money laundering and sanctions violations. Advocacy groups have since raised funds for Storm and co-founder Alexey Pertsev to support their legal defenses.
Rodriguez’s co-founder Hill is scheduled to be sentenced on Nov. 19.
Investor Takeaway
Context and Broader Implications
The sentencing of Samourai’s founders highlights a broader enforcement push by U.S. prosecutors targeting privacy-focused crypto software. Regulators have argued that developers of tools facilitating transaction obfuscation are responsible for their misuse when they profit from the services.
Privacy advocates, meanwhile, warn that criminalizing open-source software could set a precedent against innovation in the blockchain sector. The debate over mixers mirrors earlier battles over encryption and financial privacy tools — issues that continue to divide regulators, technologists, and civil liberties groups.
