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US Prosecutors Seek Maximum Five-Year Prison Term for Samourai Wallet Founders

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US prosecutors are pushing for the utmost five-year jail sentence for the founders of Samourai Wallet, accusing them of knowingly working a crypto mixing service that helped criminals launder tons of of thousands and thousands of {dollars} in unlawful funds.

Key Takeaways:

  • US prosecutors are in search of the utmost five-year jail time period for Samourai Wallet founders.
  • Keonne Rodriguez and William Hill pleaded responsible to working an unlicensed money-transmitting enterprise.
  • The case highlights the US authorities’s widening crackdown on crypto privateness instruments and open-source builders.

In a sentencing memo filed Friday within the Southern District of New York, prosecutors mentioned co-founders Keonne Rodriguez and William Lonergan Hill “repeatedly solicited, inspired, and invited criminals” to make use of Samourai Wallet to cover illicit proceeds.

Authorities declare the platform was marketed as a device for anonymity however functioned primarily as a laundering mechanism for proceeds from drug trafficking, hacking, and different legal enterprises.

US Targets $237M Laundering Case in Crackdown on Crypto Privacy Tools

The authorities estimates that no less than $237 million in legal proceeds have been funneled by means of Samourai between 2015 and its shutdown in April 2024.

The case marks some of the aggressive actions but in opposition to crypto builders accused of enabling monetary crimes by means of privateness applied sciences.

Rodriguez and Hill pleaded responsible in July to conspiracy to function an unlicensed cash transmitting enterprise, admitting they have been conscious their platform was getting used for criminal activity.

In trade for the plea, prosecutors dropped three heavier prices, together with cash laundering and sanctions violations, every of which carried potential sentences of as much as 20 years.

Rodriguez’s sentencing is ready for November 6, adopted by Hill’s on November 7.

While the probation workplace beneficial a 42-month sentence for every, prosecutors are asking for the complete five-year time period, the statutory most beneath 18 U.S.C. § 371.

The crackdown mirrors the US authorities’s broader marketing campaign in opposition to crypto mixers and privateness instruments.

In an identical case, Tornado Cash developer Roman Storm was convicted earlier this year for operating an unlicensed cash transmitter.

Prosecutors alleged that over $7 billion in tainted funds flowed by means of Tornado Cash, together with from North Korea’s Lazarus Group.

Despite parts of these sanctions being overturned, each circumstances have sparked debate over the criminalization of privacy-preserving applied sciences.

Privacy advocates argue that prosecuting open-source builders for how their instruments are used units a harmful precedent for monetary privateness and innovation within the crypto house.

Samourai Wallet Lawyers Accuse US Prosecutors of Hiding Evidence

In May, legal professionals for Samourai Wallet founders Keonne Rodriguez and William Hill accused US prosecutors of withholding evidence that would have exonerated the crypto mixer.

In a May 5 letter to a Manhattan federal court docket, the protection revealed that officers from the US Treasury’s Financial Crimes Enforcement Network (FinCEN) had instructed prosecutors months earlier than the fees have been filed that Samourai didn’t require a cash transmitter license.

Despite this, prosecutors went forward with prices alleging that the duo ran an unlicensed cash transmission enterprise.

The protection claims that prosecutors didn’t disclose FinCEN’s steerage for almost a yr, solely revealing it on April 1, 2025, in violation of authorized obligations.

FinCEN officers reportedly concluded that Samourai, being a non-custodial pockets that by no means managed customers’ funds or non-public keys, didn’t qualify as a cash providers enterprise.

Nonetheless, prosecutors pursued prices, arguing that the platform exercised “purposeful management” over property, an argument FinCEN had by no means formally endorsed.

The publish US Prosecutors Seek Maximum Five-Year Prison Term for Samourai Wallet Founders appeared first on Cryptonews.

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