Samourai Wallet operators arrested, plead guilty, and receive prison terms - the FinCEN-perimeter doctrine hardens

APR 24 2024 · 12:10

Video: Jail Sentence for Crypto Wallet with Keonne Rodriguez | DEEP FOCUS with John Kiriakou Date: 2024-04-24 · Type: failure · Tags: bitcoin, privacy, coinjoin, money-transmission, developer-liability, bank-secrecy-act, crypto-wars, samourai-wallet Non-custodial, privacy-preserving Bitcoin software; five years federal prison, the government's argument was that custody was irrelevant Keonne Rodriguez and William Lonergan Hill built Samourai Wallet as a privacy-focused Bitcoin application with CoinJoin mixing tools, Whirlpool and Ricochet, that the indictment alleged had processed over $2 billion in transaction flows. Neither man took custody of user funds; both argued they were building software tools, not running a financial service. The S.D.N.Y. disagreed. Rodriguez was arrested in Pennsylvania on April 24 2024; Hill the same day in Portugal, subject to extradition. The more serious money-laundering conspiracy charge was dropped as part of the July 30 2025 plea agreement; they pled to conspiracy to operate an unlicensed money-transmitting business and agreed to forfeit $237,832,360.55. Rodriguez received 60 months on November 6; Hill 48 months on November 19 2025. The prosecution's theory, that operating privacy infrastructure constitutes money transmission if you knowingly allow it to be used for crime-proceeds concealment, even without taking custody, became what practitioners in the space called the FinCEN-perimeter doctrine. Taken with Tornado Cash, it defined a prosecutorial frontier: developers who build tools that touch financial flows and who have any operational role in maintaining them may be exposed under the Bank Secrecy Act regardless of whether their code is custodial. The continuity with the 1990s crypto wars is structural. Phil Zimmermann shipped PGP knowing it could encrypt cartel communications; the State Department threatened him under export-control law; the case was eventually dropped. Adam Back designed Hashcash to frustrate spam filters; it became mining. The logic of prosecuting infrastructure because some users misuse it is the same logic that animated every attempt to restrict strong cryptography in the 1990s, and the same logic that the Bernstein and Junger courts rejected under the First Amendment. What has changed is that the infrastructure is now financial rather than communicative, and the courts have been slower to extend constitutional shelter to money-movement tools than to speech. Facts • Rodriguez arrested: April 24 2024, Pennsylvania; Hill: April 24 2024, Portugal • Indictment: S.D.N.Y., conspiracy to commit money laundering + conspiracy to operate unlicensed money transmitter • Samourai Wallet had ~24,000 monthly active users at peak • Guilty pleas: July 30 2025 (money-laundering count dropped in plea bargain) • Forfeiture agreed: $237,832,360.55 • Rodriguez sentence: November 6 2025, 60 months (statutory maximum on the count) • Hill sentence: November 19 2025, 48 months • Whirlpool / Ricochet processed flows: over $2B (per indictment) Primary Documents • DOJ press release on Samourai Wallet arrests (April 24 2024) https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering • IRS-CI press release on Rodriguez / Hill guilty pleas (July 30 2025) https://www.irs.gov/compliance/criminal-investigation/founders-of-samourai-wallet-cryptocurrency-mixing-service-plead-guilty • CoinDesk: Samourai Wallet Developer Sentenced to 5 Years (Nov 6 2025) https://www.coindesk.com/policy/2025/11/06/samourai-wallet-developer-sentenced-to-5-years-in-prison-for-unlicensed-money-transmitting