Bitcoin App Samourai Founders Face 5 Years in Prison Following Guilty Plea

The founders of Bitcoin mixer Samourai Wallet face up to five years in prison after pleading guilty Wednesday to conspiracy to operate an unlicensed money transmitter. 

In return for their plea, the U.S. Department of Justice agreed to drop a more serious money laundering charge that by itself carries a potential 20-year sentence, according to DOJ guidelines. The illegal money transmitter charge carries the potential five-year sentence.

Both William Lonergan Hill and Keonne Rodriguez had originally pleaded not guilty to charges but court documents on Tuesday showed they had changed their pleas.

Samourai Wallet allowed people to hide their digital money movements. The DOJ and FBI last year shuttered their platform and arrested Hill and Rodriguez, alleging that criminals used it and the defendants had ignored that. 

The government was able to secure a conviction and avoid potentially losing the case, Amanda Tuminelli, the chief legal council for the the nonprofit DeFi Education Fund, wrote in a post on X.  The organization previously told Decrypt that the case was unfair because it is “normal for people to want to be able to make financial transactions on-chain whilst still maintaining privacy.”

Lawyers for Hill and Rodriguez did not respond to Decrypt‘s questions. 

Tuminelli argued on X that the DOJ had still misinterpreted the law regarding what constitutes a money transmitter. 

“These pleas don’t change the fact that the DOJ misinterprets Section 1960 whenever they accuse a noncustodial software dev of ‘transferring funds on behalf of the public.’ And they don’t change the work we have to do: making sure the DOJ cannot continue to misapply this law,” she wrote. 

Samourai Wallet was a coin mixing app that allowed people to hide the movement of their crypto funds. 

Coin mixers are controversial apps. Criminals have used them in the past to obfuscate where they have put stolen digital assets. 

Prosecutors said that the app laundered over $100 million in dirty money. The indictment filed last year said that “while offering Samourai as a ‘privacy’ service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion.” 

The case comes as the criminal trial for privacy protocol Tornado Cash co-founder Roman Storm comes to an end. U.S. authorities banned Americans from using the Ethereum-based Tornado Cash in 2022, saying that criminals had used that platform to launder dirty money. 

A judge will sentence Hill and Rodriguez on November 6.