Samourai Wallet Founders Plead Guilty to Unlicensed Crypto Money Transmission Charges

The United States Department of Justice (DOJ) has resumed charges against the co-founders of Samourai Wallet, a cryptocurrency wallet service. This comes after Keonne Rodriguez and William Lonergan separately pleaded guilty to charges related to operating an unlicensed money-transmitting business and committing money laundering.

The defendants will face up to 25 years in prison for their roles in facilitating over $2 billion in unlawful transactions through their cryptocurrency mixing service.

Samourai Wallet Founders Face 25-Year Sentence

According to the indictment, Samourai Wallet’s mixing service, known as Whirlpool, was designed to anonymize cryptocurrency transactions. This makes it difficult for law enforcement to track illicit activity. The service allegedly laundered over $100 million in criminal proceeds, including funds from darknet markets like Silk Road.

The guilty plea follows the founders’ unsuccessful attempts to dismiss the case last year. They had argued that federal guidance indicated no license was needed for their service, but the court did not accept this defense. The founders currently face a maximum of a 25-year jail term following their plea deal. However, the court will decide the exact sentence to be passed.

This case highlights the increasing scrutiny of cryptocurrency services and the importance of compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.

Tornado’s Roman Storm In Trouble?

The Samoria wallet co-founder’s case, among others, has raised concerns about the future of decentralized finance innovation and digital privacy rights.

Recall that the DOJ is proceeding with charges against Roman Storm, co-founder of Tornado Cash. The charges are filed despite dropping one allegation related to operating an unlicensed money-transmitting business. Storm faces charges of conspiracy to commit money laundering, sanctions violations, and transmitting criminal proceeds.

The court also alleged that Tornado Cash enabled bad actors to launder over $1 billion in stolen funds. Noting that, if convicted of the said crime, the defendant could face up to 45 years in prison.

Notably, Storm’s defense team has asserted his innocence, claiming he had no control over the immutable smart contracts. On the other hand, industry advocates, including Peter Van Valkenburgh, argue that the charges are ambiguous and should be dropped.

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