In a major development, the co-founders of Samourai Wallet, Keonne Rodriguez, and William Lonergan Hill, were arrested by US authorities on charges of operating an unlicensed money-transmitting business and conspiracy to commit money laundering.
The duo allegedly facilitated the laundering of over $100 million in criminal proceeds, including funds originating from the Silk Road and Hydra Market.
Samourai Wallet’s Alleged Criminal Activities
The arrest of Rodriguez and Hill comes as a result of an extensive investigation led by the United States Department of Justice (DOJ), with collaboration from the Internal Revenue Service-Criminal Investigation (IRS-CI) and the Federal Bureau of Investigation (FBI).
The indictment unsealed by the DOJ reveals that Samourai Wallet, a cryptocurrency mixing service, allegedly conducted more than $2 billion in “unlawful transactions”, earning millions of dollars in fees.
According to the DOJ’s press release on the matter, Samourai Wallet used various features to enable anonymous financial transactions, attracting criminals seeking to engage in “large-scale” money laundering and sanctions evasion.
‘Whirlpool’ And ‘Ricochet’ Features Under Scrutiny
It is alleged that the cryptocurrency mixing service offered by Samourai Wallet, known as “Whirlpool,” facilitated the coordination of cryptocurrency exchanges between groups of users to prevent the tracing of criminal proceeds on the blockchain.
Additionally, Samourai Wallet provided a feature called “Ricochet,” allowing users to add unnecessary intermediate transactions to allegedly obfuscate the origin of cryptocurrency batches.
These features collectively processed over 80,000 BTC (worth over $2 billion) since their introduction, with Samourai Wallet collecting substantial fees estimated at $3.4 million for Whirlpool transactions and $1.1 million for Ricochet transactions, as disclosed by the DOJ.
As the legal proceedings unfold, Rodriguez has been arrested and is expected to appear before a US Judge in the Western District of Pennsylvania, while Hill was arrested in Portugal, and the United States intends to seek his extradition for trial. They face up to 5 years in prison.
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