The US Department of Justice has announced the arrest of the CEO Keonne Rodriguez and CTO William Lonergan Hill of a cryptocurrency mixing service, accused of laundering over $100 million in criminal proceeds and facilitating over $2 billion in unlawful transactions. The allegations claim that the service, Samourai Wallet, was used as a front for large-scale money laundering and sanctions evasion activities.
Uncovering Illegal Activity
The founders of Samourai Wallet have been apprehended following accusations of facilitating extensive money laundering through their platform. According to the Department of Justice (DOJ), Samourai Wallet has been disguising the origins of at least $100 million in illicit funds since 2015.
Building a Criminal Network
The DOJ asserts that Rodriguez and Hill intentionally designed features within Samourai Wallet to aid criminals in laundering money and evading financial sanctions. Their mixer, named "Whirlpool," and premium service, "Ricochet," were specifically crafted to obscure the trail of Bitcoin transactions, enabling users to conduct illegal activities under the guise of privacy.
Legal Proceedings and Global Cooperation
Rodriguez is expected to appear in a Pennsylvania courtroom shortly, while Hill, arrested in Portugal, awaits extradition. Icelandic authorities have assisted in seizing Samourai's domain and servers, and a warrant for the mobile application was served on the Google Play Store.
Features to Evade Detection
Samourai Wallet's services allegedly allowed users to insert unnecessary intermediary transactions (known as 'hops') into transactions, complicating the tracing of funds. Despite presenting itself as a privacy-focused entity, Samourai Wallet is accused of actively courting criminals and sanctions evaders.
Marketing Misconduct
Prosecutors highlight Samourai's Twitter activity, where the company welcomed Russian oligarchs as users following sanctions enforcement. Additionally, marketing materials reportedly targeted criminal individuals, acknowledging their service's appeal to those engaged in illegal activities.
Alleged Criminal Collaborations
The DOJ further claims that Samourai Wallet facilitated the laundering of funds from the Silk Road and Hydra dark web markets. In more detail:
- In 2022, 151 Bitcoin (approximately $5.74 million at the time) was a web server intrusion and customer database exfiltration
- In 2021 & 2022, a spearphishing scheme targeting a cloud service provider and its corporate clients to steal $10 million worth of cryptocurrency from victim entities
- From 2021 until 2023, 1,343 Bitcoin phishing attacks on a decentralized finance protocol
Additionally, the service allegedly aided cybercriminals in concealing their identities during high-profile hacking incidents.
Increased Law Enforcement Focus
This arrest aligns with a broader trend of law enforcement cracking down on infrastructure supporting cybercrime, following recent convictions and arrests related to other cryptocurrency mixers like Bitcoin Fog and Tornado Cash.
