Reported by The Block, Co-founders of the crypto mixing service Samourai Wallet were arrested and prosecutors say they were involved in laundering $100 million from the Silk Road and other illicit markets.
CEO Keonne Rodriguez, 35, and Chief Technology Officer William Lonergan Hill, 65, were charged on Wednesday with operating the Samourai Wallet. Prosecutors say Samourai is an unlicensed money-transmitting business and was involved in over "$2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets," including Silk Road.
"Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns. Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct," said U.S. Attorney Damian Williams in a statement on Wednesday.
Rodriguez was arrested on Wednesday morning and will go either today or on Thursday before a judge in Pennsylvania. Hill was arrested in Portugal and the U.S. is seeking extradition, according to a statement.
Samourai's web servers and domain were also seized and the application is no longer available to be downloaded from the Google Play Store in the U.S., prosecutors said.
"Samourai Wallet is now closed for business," said IRS-CI Special Agent in Charge Thomas Fattorusso in a statement.
The DOJ said Rodriguez and Hill designed Samourai to offer two features, including a crypto mixing service called "Whirlpool" to help people engage in criminal conduct. The pair also encouraged users to launder criminal proceeds through the mixer on X, formerly known as Twitter, prosecutors alleged.
Hill allegedly discussed the use of Samourai by criminals operating in online black markets in a private message on the social media site.
"At Samourai we are entirely focused on the censorship resistance and black/grey circular economy. This implies no foreseeable mass adoption, although black/grey markets have already started to expand during covid and will continue to do so post-covid. . . .," Hill said in the message.
The money laundering and unlicensed money transmitting business charges lodged against Rodriguez and Hill carry a maximum sentence of 20 years and five years, respectively.
U.S. prosecutors have brought other charges against crypto-mixing services including Tornado Cash. Its founders Roman Storm and Roman Semenov were charged with money laundering last year.
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