The founders of Bitcoin mixing platform Samourai Wallet could face up to five years in prison after pleading guilty to operating an unlicensed money transmitter.
The plea agreement, entered Wednesday, spares the pair from a more serious money laundering charge that carried a potential 20-year sentence.
Court documents show that William Lonergan Hill and Keonne Rodriguez, who had previously pleaded not guilty, changed their pleas in the Southern District of New York.
Under the agreement, the US Department of Justice dropped the money laundering count, leaving only the charge of running an unlicensed money-transmitting business, which carries a maximum sentence of five years.
Samourai Founders Accused of Marketing Platform as Money Laundering Tool
The DoJ and FBI shut down Samourai Wallet in 2024. They also arrested the two founders. Authorities alleged that the service knowingly enabled criminals to hide illicit funds. Moreover, prosecutors said the platform laundered over $100m. They added that it was actively marketed as a tool for large-scale money laundering and sanctions evasion.
Samourai Wallet was a popular coin mixing app that allowed users to obscure the flow of their crypto transactions. These services combine multiple transactions together, making it harder to trace funds on a public blockchain.
While privacy advocates view mixers as vital tools for financial anonymity, US authorities have long linked them to cybercrime and stolen funds.
The conviction marks a significant outcome for federal prosecutors, who have increasingly targeted developers of privacy-focused crypto tools.
Case Sparks Debate Over Balancing User Privacy With Law Enforcement Goals
Coin mixers have been at the center of other high-profile crackdowns. The trial of Tornado Cash co-founder Roman Storm, a case closely watched by the crypto industry, is set to conclude this week.
US authorities banned Americans from using Tornado Cash in 2022, saying the Ethereum-based protocol had been used to launder billions in illicit funds.
Samourai Wallet’s founders also face steep financial penalties. The plea agreement includes the forfeiture of $237m and a $400,000 fine. Sentencing is scheduled for Nov. 6, and federal guidelines call for up to 60 months in prison.
The case has sparked a broader debate about the future of privacy tools in cryptocurrency. Prosecutors argue that criminals often abuse these services. However, advocates counter that they are essential for protecting user confidentiality on transparent public ledgers.
Further, the guilty pleas could also influence other pending cases. The DOJ has already brought similar charges against developers of other mixers, such as Bitcoin Fog. As a result, the Samourai outcome may embolden prosecutors to continue pursuing such actions.
For now, Hill and Rodriguez await sentencing as the industry weighs the wider impact of the case.
The post Samourai Wallet Executives Stare at 5-Year Sentence After Pleading Guilty appeared first on Cryptonews.
