Important points
- U.S. prosecutors are seeking a five-year prison sentence for the founder of Samurai Wallet.
- Authorities claim the app laundered $237 million in illegal funds.
- The developers claim they built the wallet to protect digital privacy, not to support criminals.
The creators of Samurai Wallet, a popular Bitcoin privacy application, have pleaded guilty to charges related to operating an unauthorized money transfer business and face the possibility of maximum prison sentences.
U.S. prosecutors have sought the statutory maximum sentence of five years in prison for Keonne Rodriguez and William Lonergan Hill, alleging that the developers knowingly built and sold privacy tools to help criminals launder hundreds of millions of dollars in illegal money.
Prosecutors allege Samurai Wallet processed at least $237 million related to drug trafficking, darknet markets, cyberattacks, fraud schemes and even child exploitation sites, according to a government sentencing memorandum filed in the Southern District of New York.
They claim that the privacy features of the wallets, especially Whirlpool and Ricochet, were intentionally designed to hide the origins of illegal transactions.
The memorandum states that the defendants “repeatedly solicited, encouraged, and invited criminals” to use their platform. Prosecutors said Rodriguez and Hill were “more than mere bystanders” and argued that their marketing specifically targeted users trying to hide their illegal profits.
Samourai Wallet, launched in 2015, was designed to enhance financial privacy for Bitcoin users by blocking transaction trails on the blockchain. It is a non-custodial wallet, meaning the developer never held or controlled users’ funds, a fact that was central to the developer’s defense.
Hill and Rodriguez insist their goal is to promote digital privacy, not encourage crime.
In a letter to the court, Hill wrote: “I co-founded a software company that develops tools that can provide the anonymity needed to make Bitcoin work as intended.”
He added that he believes deeply in “the idea of freedom and freedom from government overreach,” and said his goal is for Bitcoin to serve as a “digital cash” that guarantees individual independence.
Rodriguez echoed those sentiments in his own defense letter, saying he had sought and followed legal advice. “We had a lawyer who told us that our practice was compliant.” He stressed that they never keep users’ funds and believe they are acting within the law.
The defense also cited the support of New York University professor David L. Yermak, who framed the project within the cypherpunk tradition.
Yermak described Samurai as part of a movement that sees cryptography as a way to protect personal freedom and resist government surveillance.
However, prosecutors paint a completely different picture. They allege that Rodriguez and Hill marketed Samurai directly to darknet users and referred to Bitcoin as “black market money.”
Citing private chats and forum posts, the government said developers described Samourai as a “laundry service” for criminals and boasted that its features made “linking inputs and outputs virtually impossible.”
The memo also references specific messages, including a 2018 WhatsApp chat in which Rodriguez allegedly referred to the commingling as “Bitcoin money laundering.” Prosecutors also allege that Hill promoted Samurai on dark web forums as a tool to “clean up dirty Bitcoin.”
The service processed more than $2 billion in transactions between 2015 and 2024, including at least $237 million in confirmed criminal proceeds, authorities said.
Additionally, the developers claim they collected approximately $6.3 million in fees. This is approximately 246.3 BTC, which is now worth about $26.9 million due to the rise in Bitcoin prices.
A controversial element of this case concerns the data collected from Samourai users. Prosecutors allege that despite privacy-focused marketing, the developers retained technical data that allowed them to “isolate” and track some transactions.
Hill disputed this characterization, explaining that the data, known as “XPUB” information, was needed to calculate wallet balances for users who are not running their own Bitcoin nodes.
He revealed that only about 20% of users were affected and argued that this was a necessary design choice and not evidence of surveillance or deception.
Privacy advocates say such prosecutions risk criminalizing innovation and coding itself. Reflecting growing concerns within the digital asset community, mathematics is not a crime, and neither should privacy.
The Probation Office recommended a sentence of 42 months in prison, but prosecutors are seeking the maximum sentence allowed under U.S. law, five years, for conspiracy to operate an unauthorized money transfer business.
