U.S. Takes Sudden Action! Coin Mixer Samourai Involved in Money Laundering, Arrested; Snowden: U.S. Violation of Financial Privacy "Constitutes a Crime"

The U.S. Department of Justice announced on Wednesday (April 24th) that the CEO of cryptocurrency mixer Samourai Wallet, Keonne Rodriguez, and Chief Technology Officer William Hill, have been arrested. They are charged with conspiracy to commit money laundering, which could result in up to 20 years in prison, and operating an unlicensed money transmitting business, which carries a maximum penalty of 5 years.

According to a report by CoinTelegraph, Keonne was arrested in Pennsylvania, USA, and William was arrested simultaneously in Portugal. The U.S. Attorney's Office for the Southern District of New York stated that the U.S. will seek the extradition of William for trial.

Currently, the servers and domains of Samourai Wallet in Iceland have been seized, and a prohibition order to download the Samourai App from the Google Play Store has been issued, with the app having been downloaded over 100,000 times.

The U.S. Department of Justice accuses Samourai Wallet of conducting over $2 billion in illegal transactions and facilitating over $100 million in money laundering transactions for well-known illegal darknet markets such as Silk Road and Hydra Market. The wallet is also alleged to have been involved in hacking web servers and phishing scams targeting decentralized finance (DeFi) protocols.

Samourai Wallet allegedly used Whirlpool and Ricochet protocols to create additional, unnecessary transactions to obscure the flow of users' funds, reportedly charging $4.5 million in fees for this service.

In recent years, the U.S. government has frequently targeted mixing protocols, with the Office of Foreign Assets Control (OFAC) sanctioning Blender.io in May 2022. Subsequently, in August of the same year, Tornado Cash was added to the sanctions list, prohibiting U.S. residents from using the service and arresting one of its co-founders.

In October 2023, following a Hamas attack on Israel, the U.S. Treasury's Financial Crimes Enforcement Network proposed classifying cryptocurrency mixers as a primary money laundering concern, requiring domestic financial institutions to maintain certain records and report transactions involving mixers.

After the indictment of Samourai Wallet, former NSA employee Edward Snowden, who exposed the U.S. global surveillance program in 2013, tweeted: "The U.S. Department of Justice is again criminalizing developers restoring financial privacy applications. The solution is to default to privatizing money, privacy should never be an exception, otherwise, it constitutes a crime."

As a whistleblower of the "PRISM" incident and a former U.S. defense contractor who fled the U.S., Snowden earlier in February hinted that this year sovereign governments would be revealed to be purchasing Bitcoin as a modern alternative to gold reserves, without disclosing this fact publicly.

He wrote: "Prediction: This year, it will be revealed that national governments are purchasing Bitcoin, the modern alternative to monetary gold, but have not disclosed this fact publicly."