Keonne Rodriguez and William Lonergan Hill, the minds behind Samourai Wallet—a Bitcoin wallet engineered for maximum user privacy—have changed course after years of defending their work. Rodriguez, who served as CEO, and Hill, the CTO, have now pleaded guilty to serious federal charges: conspiracy to commit money laundering (carrying up to 20 years in prison) and operating an unlicensed money-transmitting business (up to five years).
Their guilty pleas, formally submitted and accepted in court the next day by Judge Denise Cote in the Southern District of New York, followed unsuccessful attempts to dismiss the case. The developers had long maintained that Samourai Wallet was simply a non-custodial software tool—akin to a calculator for crypto transactions—not a financial service provider. But U.S. authorities saw things differently.
Prosecutors argued that the wallet’s mixing features, such as “Whirlpool” and “Ricochet,” were explicitly designed to obscure transactions, a functionality that enabled over ₹16,620 crore ($2 billion) in illicit transfers. The DOJ also revealed that Rodriguez and Hill had allegedly pocketed ₹37.4 crore ($4.5 million) in service fees, while internal communications showed them expressing ideological support for the “black/grey economy.”
Bitcoin Mixers: Privacy Tools or Criminal Enablers?
At the center of the debate lies the mixer itself—a cryptographic tool used to anonymize cryptocurrency transactions. Samourai Wallet’s Whirlpool feature allowed users to mix their Bitcoin with others’, effectively severing traceability. While privacy advocates, journalists, and political dissidents have long argued for the necessity of such tools, law enforcement agencies insist they’re too often leveraged by cybercriminals, drug traffickers, and even terrorist financiers.
This dual-use dilemma—much like debates over end-to-end encryption—continues to divide the crypto world. Proponents say Bitcoin mixers are digital analogues of physical cash, essential for privacy in a surveillance-heavy internet era. Regulators say they are loopholes that threaten global efforts to enforce Anti-Money Laundering (AML) laws.
Samourai’s case follows closely on the heels of the DOJ’s prosecution of Tornado Cash, an Ethereum-based mixer whose co-founder, Roman Storm, is also facing money laundering charges. The convergence of these high-profile prosecutions signals a more aggressive posture by the U.S. government toward crypto privacy infrastructure.
The Legal Fallout and the Precedent Set
The failure of Rodriguez and Hill’s legal defense may have far-reaching implications. Their arguments rested on three pillars:
- That Samourai Wallet was non-custodial and thus not a “money transmitter” under FinCEN rules
- That existing DOJ guidance cautioned against charging developers for “unintentional” violations
- That the open-source nature of their software placed responsibility on users, not creators
Yet the court found these arguments insufficient in light of the evidence, particularly internal messages that suggested the founders knew how their product was being used—and supported it. Prosecutors emphasized intent, not ignorance, and drew a direct line from tool to illicit use.
Now facing sentencing, the co-founders could receive up to 25 years behind bars, though actual terms may be reduced based on cooperation or plea deal specifics. But the message to other developers is chilling: releasing open-source code with privacy-enhancing features might not shield you from liability if the government links it to crime.
Industry observers worry about a ripple effect. Developers of privacy tools may hesitate to publish or maintain their work. Investors might pull back from funding privacy-focused crypto projects. And governments across the world, emboldened by these U.S. convictions, could introduce similar crackdowns under the guise of AML compliance.