U.S. prosecutors have urged a Manhattan court to impose the maximum five-year prison term on Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill, a consequential clash between crypto-privacy ideals and anti-money-laundering enforcement
The pair pleaded guilty earlier this year to conspiracy to operate an unlicensed money-transmitting business under 18 U.S.C. § 371, admitting their software helped launder more than $237 million in illicit funds between 2015 and 2024.
Prosecutors’ Push for the Maximum
In a 1 November sentencing memorandum, the Southern District of New York painted Rodriguez and Hill not as neutral coders but as “active enablers of crime.”
Messages and marketing materials allegedly show the founders describing their wallet as a tool for “Bitcoin laundering” and advertising on dark-web forums as recently as 2023.
Prosecutors claim the duo earned $6.3 million in fees (roughly 246 BTC, now worth about $26.9 million) directly from laundering activity. They rejected the U.S. Probation Office’s recommendation of 42 months, insisting on the full five years to “reflect the seriousness of the offence and deter others.”
“For nearly a decade, Rodriguez and Hill owned and operated a massive money laundering service known as ‘Samourai Wallet,’ which laundered millions of dollars in criminal proceeds on behalf of its customers.”
– The filing stated.
Defence Argues Privacy, Not Profit
The defence counters that Samourai Wallet was built on cypherpunk principles, not criminal intent. Rodriguez and Hill argue that as a non-custodial wallet, it never held user funds and was designed for legitimate privacy, citing FinCEN guidance and 2020 legal advice supporting that view.
They have requested time served, emphasising their cooperation and remorse. Rodriguez highlighted his creation of OXT, a blockchain-analysis tool used to recover funds from incidents like Mt. Gox, while Hill admitted that past marketing language was “reckless but not malicious.”
From Privacy Tool to Criminal Target
Founded in 2015, Samourai Wallet offered privacy-centric Bitcoin features including Whirlpool (a coin-mixing protocol) and Ricochet (extra transaction hops for obfuscation). Authorities say those same functions were exploited by criminals to wash proceeds from darknet markets, ransomware, and sanctions-evasion networks.
The April 2024 arrests led to seizures of servers, domains, and app-store listings. The original indictments carried 20-year counts for money-laundering and sanctions violations, but a July 2025 plea deal reduced them to the single conspiracy charge in exchange for forfeiting the $237.8 million.
What Comes Next
Sentencing hearings are set for 6 and 7 November 2025. No verdicts have yet been delivered.
The Samourai Wallet case follows the Tornado Cash prosecution and may define how far regulators can reach into open-source privacy software.
Advocates warn that equating code with crime risks chilling innovation and criminalising privacy engineering. Regulators, meanwhile, see the verdict as essential to draw a bright line between privacy and facilitation.
Either way, the ruling will echo across a crypto sector still wrestling with a simple question: when does financial privacy become a felony?
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice.
