Co-Founders of Samourai Wallet Arrested for Operating Unlicensed Money Transmitter
The US Department of Justice (DOJ) has announced the arrest of the co-founders of Samourai wallet. In an April 24 report, the DOJ arrested Samourai Wallet chief executive Keonne Rodrique and the chief technology officer William Hill for facilitating money laundering activities.
The regulators claimed that Samourai’s wallet operated as an unauthorized money transmitter. In its report, the DOJ claimed that Rodrique and Hill’s participation in developing and operating the Samourai Wallet was punishable by the law.
Samourai Co-Founders Arrested
The DOJ prosecutor argued that the two might receive a maximum of 20 years imprisonment and an additional five years jail term for operating an unlicensed money transmitter.
The law enforcers accused the men behind Samourai Wallet of supporting the transfer of $2 billion in illicit funds. Also, the regulators noted that the Samourai Wallet facilitated the transfer of $100 million obtained from dark web markets.
According to the report, the regulators noted that the Samourai wallet was used to transfer illicit funds during the Silk Road and Hydra Market saga. It implies that the illegal funds obtained from fraudulent schemes and spear phishing schemes were transferred through the digital wallet under probe.
A source privy to the information stated that the CEO was apprehended in Pennsylvania, United States, while his colleague Mr. Hill was arrested in Portugal. The arrest of the two demonstrated that law enforcers were committed to restoring financial integrity.
US Law Enforcers Take Action Against Crypto Mixers
Following the arrest of the two executives, the Iceland law enforcers confiscated the Samourai Wallet proprietary tools, including the web server and domain. Also, the regulators have issued a warrant to suspend the download of the Samourai app from the Google and Apple marketplace.
At the time of arrest, law enforcement noted that the Samourai app had over 100,000 users. Upon contacting the Samourai to enquire more about the incident, the official did not comment.
In a separate report, the US Attorney’s Office of the Southern District of New York argued that the defense team would seek Hill’s extradition to Portugal. The federal agency claimed that the two officials knew that criminals were using the Samourai Wallet to transfer dirty money.
The prosecutors alleged that Hill and Rodrique hyped the Samourai wallet as a crypto mixer that hides the source of the funds. On X, the prosecutors claimed that the Samourai team had invited users to launder their illicit funds.
The X post welcomed the notorious illicit groups, including Russian Oligarch, to use the Samorai wallet in transferring funds. The probing team noted that Samourai offered Whirlpool crypto mixing and Ricochet services.
Criminal Explore New Ways to Launder Illicit Funds
The law enforcer noted that the anonymity nature of the Samourai Wallet enabled the gangs to conceal their unlawful activities. The Samourai wallet created alternative methods to transfer funds obtained from illegal activities.
The unique features of the Samourai wallet attracted a large following. As of the press, the wallet generated $4.5 million in revenue from transferring illicit funds. The arrest of Hill and Rodrique coincides with the ongoing crackdown on crypto mixers in the United States.
In October, the Biden administration labeled the crypto mixers as the breeding ground for laundering illicit funds. The White House claimed that crypto mixers’ popularity has posed a threat to national security.
In support of Biden bid to address money laundering, the federal prosecutors at Manhattan court accused two individuals of their role in the operation of the Tornado Cash Mixer. The prosecutors argued that the developers of Tornado Cash supported the violation of the Western sanction.
In 2022, the US law enforcer took immediate action against the Blender.io crypto mixer for facilitating the laundering of funds stolen from the Ronin Bridge attack.
They claimed that Blender.io supported the transfer of $20.5 million obtained from the Vietnam play to earn the game Axie Infinity. In a subsequent report, the law enforcer noted that Russian illicit groups, including Trickbot, Ryuk, and Gandcrab, used Blender.io.
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