Samourai Wallet co-founders to now plead guilty to US charges

[cryptohog]

Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill say they’ll change their not guilty plea relating to charges tied to their crypto mixing service.
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Samourai Wallet co-founders to now plead guilty to US charges
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Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill have said that they now wish to plead guilty to charges stemming from their involvement in the crypto mixing protocol.

Separate filings on behalf of Rodriguez and Hill were made in a New York federal court on Tuesday, which said the duo would change their pleas before the court on Wednesday morning.

The pair pleaded not guilty to charges in April 2024 for running what prosecutors alleged to be an unlicensed money-transmitting business that processed over $2 billion worth of unlawful transactions, including some tied to illicit online marketplaces like Silk Road.
Document on behalf of Keonne Rodriguez reflecting his change in plea. Source: CourtListener

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Samourai co-founders face 25-year prison sentence

Rodriguez, Samourai’s CEO, and Hill, its chief technology officer, were charged with conspiracy to commit money laundering, which carries a maximum prison sentence of 20 years.

The pair were also charged with operating an unlicensed money-transmitting business, which carries a sentence of five years, meaning they could face a maximum of up to 25 years behind bars.

Judge Denise Cote scheduled hearings to discuss the change in pleas for Wednesday morning. The document didn’t provide additional details on how the plea change may impact their sentences.

A trial for the pair was set to start on Nov. 3.
Samourai co-founders tried to toss the case

The change in pleas came nearly four months after the pair tried to dismiss the case in early April, pointing to an April 7 memo from Deputy Attorney General Todd Blanche that said the Department of Justice wouldn’t prosecute those behind crypto mixers for “unwitting violations of regulations.”

A month later, Samourai’s lawyers alleged that federal prosecutors suppressed advice that the company didn’t need a money transmitting license six months before the founders were eventually charged.

Related: ‘A joke in poor taste’: Tornado Cash T-shirt stirs controversy in court

Neither attempt to sway the prosecutor’s case was effective.

Samourai worked similarly to other crypto mixer protocols, taking funds from multiple users and blending them to hide their origins.
Guilty pleas come amid Roman Storm’s trial

Another crypto mixer under the spotlight is Tornado Cash, with one of its creators, Roman Storm, currently being tried before a jury.

Storm’s backers say an unfavorable outcome in the case could establish a precedent for criminalizing open-source privacy tools, posing a serious risk to decentralized finance innovation while significantly restricting privacy rights.

Storm was charged with conspiracy to commit money laundering and sanctions violations in 2023. If convicted on all counts, Storm could face up to 45 years behind bars.

[Maxwell]

The Samourai guilty pleas could mark a turning point for crypto privacy tools. If open-source devs are now liable for how users interact with their protocols, it raises serious questions about the future of decentralized tech.

[rafihasan]

Prosecutors rejecting earlier defenses and pushing for a guilty plea signals a broader crackdown. The DOJ seems to be drawing a hard line between privacy and anonymity used to shield criminal conduct.

[Nahiar806]

With Tornado Cash and Samourai both under fire, the privacy vs. compliance debate in crypto is heating up. The outcome of these cases could define how regulators approach mixers for years to come.