Cryptocurrency Mixer Service Charged With Money Laundering Over $100 Million
The U.S. Department of Justice has recently charged Keonne Rodriguez and William Lonergan Hill for operating a cryptocurrency mixer service called Samourai that was found to be involved in laundering over $100 million from numerous criminal entities. According to the superseding indictment, Samourai’s Whirlpool crypto mixer was also utilized by criminals to launder over $2 billion in illegal funds from 2015 to 2024, when the service was seized.
In addition to offering crypto mixing services, Samourai also provided a service called “Ricochet” which allowed users to send cryptocurrency through multiple intermediate transactions in order to evade law enforcement and crypto exchange detection. The indictment reveals that the two founders earned approximately $4.5 million in fees from Whirlpool and Ricochet transactions.
The amount of money that flowed through Samourai’s services is estimated to be around 80,000 BTC, which is worth over $2 billion. The company’s mobile application, Samourai’s Wallet, was downloaded over 100,000 times, allowing users to securely store private keys and anonymously exchange funds with other users.
In light of the charges, Samourai’s website and servers have been seized by Icelandic law enforcement and the Google Play Store has removed the company’s mobile app following a seizure warrant. One of the founders, Rodriguez, has been arrested and will appear in court shortly, while the other, Hill, has been arrested in Portugal and the U.S. government is seeking his extradition for trial.
Charges and Motivations
Rodriguez and Hill are both facing two counts of conspiracy: money laundering, which carries a maximum sentence of 20 years, and operating an unlicensed money-transmitting business, which carries a maximum sentence of 5 years. The DOJ has stated that while Samourai promoted itself as a privacy service, the founders were fully aware that it was being used by criminals for large-scale money laundering and sanctions evasion.
The indictment reveals that the laundered funds originated from various sources, such as illegal dark web markets, wire fraud and computer fraud schemes, and other illegal activities. This case highlights the increasing use of cryptocurrency in criminal activities and the need for stricter regulations and oversight in the industry.
It also serves as a reminder to cryptocurrency users to be cautious of the services they use and to only engage in legal and transparent transactions. As the use of cryptocurrency continues to increase, it is important to implement measures to prevent its misuse for illicit activities.
Conclusion
The Department of Justice’s charges against Samourai and its founders for money laundering and operating an unlicensed money-transmitting business highlight the importance of proper regulations and oversight in the cryptocurrency industry. This case also serves as a warning to those engaging in illegal activities using cryptocurrency and emphasizes the need for users to do their due diligence and only use legitimate and transparent services.