The US Department of Justice (DoJ) on Wednesday announced the arrest of two co-founders of a cryptocurrency mixer called Samourai and seized the service on charges of facilitating more than $2 billion in illegal transactions and laundering more than $100 million in criminal proceeds.
To that end, Keonne Rodriguez, 35, and William Lonergan Hill, 65, were charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business from 2015 to February 2024. Rodriguez and Hill face a maximum sentence of 25 years. each in prison.
Rodriguez, the company’s CEO, and CTO Hill intentionally designed Samourai to help “criminals engage in large-scale money laundering and sanctions evasion,” apparently advertising it as a privacy-oriented service, he said. the DoJ said.
Samourai laundered money from illegal dark web marketplaces, including Silk Road and Hydra, as well as spear phishing and scam schemes aimed at defrauding multiple decentralized financial protocols.
The operation, which also involved law enforcement from Iceland and Portugal, along with Europol, saw the confiscation of the digital infrastructure and the withdrawal of the Android app from the Google Play Store in the United States Hill, who was arrested in Portugal, he is awaiting extradition in court. US Rodriguez was arrested in Pennsylvania.
Samourai offered a cryptocurrency mixing service known as Whirlpool to help users hide the trail of cryptocurrency transactions, as well as incorporating a “exclusive transaction type” called Ricochet Send that made it possible to add intermediate hops when sending cryptocurrency from one address to another.
Whirlpool has been touted as a way to “mathematically decouple ownership of inputs from outputs in a given bitcoin transaction,” which they say increases the privacy of users involved, protects against financial surveillance, and improves the fungibility of the Bitcoin network.
“Ricochet defends against bitcoin blacklists by adding additional decoy transactions between the initial send and the eventual recipient,” according to official documentation. “You should consider using Ricochet when sending to Bitcoin Exchanges and companies known to close accounts for flimsy reasons.”
The feature is designed to prevent law enforcement and/or cryptocurrency exchanges from recognizing that a particular batch of cryptocurrency originated from criminal activity, the DoJ said.
In addition to openly courting users (e.g., Russian oligarchs) to evade sanctions and launder criminal proceeds through Samourai on their X (formerly Twitter) account, the defendants were also found transmitting marketing materials to investors describing how its user base was intended to include online gamblers and criminals who need anonymity to conduct their illegal activities.
“Rodriguez and Hill acknowledge that its revenues will derive from ‘dark/grey market participants’ who will seek to ‘trade their bitcoin to multiple parties’ to avoid detection,” the DoJ said.
The arrests come weeks after a former security engineer named Shakeeb Ahmed was sentenced to three years in prison in the United States on charges related to the hacking of two decentralized cryptocurrency exchanges in July 2022 and theft of more than 12.3 million of dollars, which were then recycled using Samourai Whirlpool.