NewsletterCryptoQuant CEO Slams DoJ For Charges Against Samourai Wallet Founders
Highlights
- The U.S. DoJ recently arrested the two founders of Samourai Wallet.
- They were accused of money laundering worth about $100 million.
- Prosecutors accused the defendants of using their crypto mixing services for illicit activities.
The founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, are facing charges of money laundering conspiracy brought by federal prosecutors. This move aligns with the U.S. government’s ongoing efforts to prosecute tools in the crypto space used for mixing funds.
Moreover, they deem it a move by illicit entities and foreign actors aiming to conceal financial transfers. However, the Department of Justice (DoJ) has attracted backlash from pressing charges against Samourai Wallet founders. CryptoQuant CEO and founder Ki Young Ju advocated for Samourai Wallet and its founders.
CryptoQuant CEO Backs Samourai Wallet
In a post on X, the CryptoQuant CEO wrote, “The US DOJ has arrested pioneers in #Bitcoin privacy technology.” He noted that crypto mixing is not a crime by itself since it enhances privacy. Ju noted, “Privacy stands as a core value of Bitcoin. Mixing itself is not a crime. Even crypto exchanges use mixing to safeguard user privacy.”
Furthermore, Ju highlighted that the way a feature is used and the intent behind deems it as lawful or illicit. He compared the Samourai wallet case the to usage of a knife, which can both be lawful and illegal. The CryptoQuant founder noted, “It’s like punishing the inventor of the knife instead of the one who uses it.
However, in the announcement, it was revealed that Rodriguez and Hill stand accused of designing, promoting, and operating a mixing service responsible for facilitating over $100 million in money laundering transactions from illicit dark web markets. Allegedly, Samourai Wallet has enabled approximately $2 billion in illicit transactions since its inception in 2015.
Also Read: DOJ Arrests Samourai Wallet Duo for Laundering $100M
Other Charges Pressed On Keonne Rodriguez & William Lonergan Hill
Moreover, prosecutors claimed that the duo amassed around $4.5 million in fees for their mixing services on Samourai Wallet. These services offered different features charging varying pool fees. Charges against them include conspiracy to commit money laundering and conspiracy to run an unlicensed money transmitting business, carrying potential maximum sentences of 20 years and five years, respectively.
In addition, Rodriguez has been apprehended and is expected to be arraigned in Pennsylvania. Meanwhile, Hill, serving as the CTO of Samourai Wallet, was detained in Portugal and faces extradition to the U.S. Additionally, authorities have seized the Samourai Wallet website, hosted in Iceland, and issued a warrant for the seizure of its mobile application from the Google Play Store.
According to the Department of Justice (DOJ), Rodriguez and Hill allegedly encouraged users to launder criminal proceeds through their mixer, with evidence cited from tweets and private messages. The mobile app has garnered over 100,000 downloads.
Allegedly, the founders’ focus was on censorship resistance and the black/grey circular economy, with no expectation of mass adoption but rather targeting black/gray markets, particularly during and after the COVID-19 pandemic.
They purportedly sought investors by pitching to “dark/gray market participants,” with marketing materials listing “Restricted Markets.” This was executed alongside online gambling and asset protection as target demographics.
Also Read: Ex-SEC Official Reacts To DOJ Seeking 3-Year Prison Term For Binance Founder CZ
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