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Federal prosecutors are urging a New York court to impose maximum five-year sentences on Samourai wallet founders Keonne Rodriguez and William Lonergan Hill, accusing them of facilitating $237 million in criminal transactions through their crypto privacy platform.
In a sentencing memorandum filed Friday in the Southern District of New York, prosecutors alleged the duo “repeatedly solicited, encouraged, and invited criminals” to use the Samourai Wallet to conceal illicit proceeds from drug trafficking, hacking, and other crimes.
Authorities said the platform was presented as a privacy tool but functioned primarily as a laundering service for criminal enterprises.
“The defendants built and promoted a platform that operated in the shadows of the financial system, knowing it was being used to hide the proceeds of crime,” prosecutors wrote in the memo.
The case, which dates back to 2015 and culminated in the platform’s shutdown in April 2024, is one of the US government’s most aggressive actions against crypto privacy developers.
The Samourai wallet founders pleaded guilty in July to conspiracy to operate an unlicensed money transmitting business, admitting they knew the platform was used for illegal activity. In exchange, prosecutors dropped more serious charges of money laundering and sanctions violations each carrying potential sentences of up to 20 years.
Rodriguez is scheduled to be sentenced on November 6, while Hill’s hearing is set for November 7. Although the probation office recommended a 42-month sentence for each, prosecutors are requesting the statutory maximum of five years under 18 U.S.C. § 371.
The Department of Justice (DOJ) claims that at least $237 million in criminal proceeds were processed through Samourai Wallet between 2015 and 2024. The prosecution’s request underscores the Biden administration’s escalating crackdown on crypto privacy services that allegedly facilitate money laundering and sanctions evasion.
“This case sends a clear message that tools designed to conceal illicit activity will not be tolerated,” said a DOJ spokesperson, in a statement accompanying the filing.
The prosecution of the Samourai wallet founders mirrors similar actions against other crypto privacy tools, notably Tornado Cash, whose developer Roman Storm was convicted earlier this year for operating an unlicensed money transmitter.
Authorities alleged that more than $7 billion in illicit funds flowed through Tornado Cash, including transactions tied to North Korea’s Lazarus Group. Despite portions of those sanctions being overturned in court, the case remains emblematic of Washington’s growing intolerance toward privacy-focused crypto protocols.
Legal experts say the Samourai and Tornado Cash prosecutions could redefine how open-source developers are treated when their code is used unlawfully.
“These cases raise profound questions about whether writing and publishing privacy software can itself be criminalized,” said Neeraj Agrawal, Director of Communications at the Coin Center, a Washington-based crypto policy think tank.
In a sharp twist, lawyers for the Samourai wallet founders have accused prosecutors of withholding evidence that could have exonerated their clients. In a May 5 letter to the Manhattan federal court, the defense said the Financial Crimes Enforcement Network (FinCEN) had previously informed the DOJ that Samourai did not require a money transmitter license.
According to the filing, FinCEN officials concluded that Samourai, being a non-custodial wallet that never controlled user funds or private keys, did not qualify as a money services business under federal guidance. Despite that conclusion, prosecutors continued with charges, arguing that the platform exercised “functional control” over user assets as a position FinCEN never officially endorsed.
“The government withheld this information for nearly a year, only disclosing it on April 1, 2025,” defense attorneys wrote. “That omission fundamentally undermines the fairness of this prosecution.”
The ongoing sentencing of the Samourai wallet founders has sparked renewed debate over the boundaries between financial privacy and criminal facilitation in the blockchain ecosystem. Privacy advocates warn that criminalizing privacy tools sets a dangerous precedent for innovation.
“Punishing developers for the misuse of their open-source code by bad actors chills innovation and privacy protections for everyone,” said Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation. “Privacy is not a crime; it’s a cornerstone of individual freedom.”
As the crypto industry awaits the court’s final decision, the Samourai wallet founders case remains a pivotal test for how regulators, developers, and privacy advocates define accountability in a decentralized financial world.
The verdicts expected this week will likely influence how future blockchain developers approach privacy design and how far the US government will go in its pursuit of financial transparency.
