Bitcoin Privacy Pioneer Turned Criminal: Samourai Wallet CEO Sentenced to Maximum Prison Term in $237 Million Laundering Case

Bitcoin Privacy Wallet Developer Sentenced to Five Years for Unlicensed Crypto Mixing

A U.S. court has handed down a five-year prison sentence to Keonne Rodriguez, co-founder of Samourai Wallet, following allegations that the Bitcoin privacy platform facilitated the laundering of at least $237 million in illicit funds.

The ruling, issued by U.S. District Judge Denise Cote in the Southern District of New York on 6 November 2025, also includes a $250,000 fine and three years of supervised release.

How Did Samourai Wallet Become a Target of Federal Enforcement

Rodriguez and his business partner, William Lonergan Hill, developed and marketed Samourai Wallet as a tool to protect Bitcoin users’ privacy.

Prosecutors, however, accused them of deliberately designing features such as CoinJoin and Ricochet to obscure transaction origins, enabling users to launder money from darknet markets, hacks, fraud schemes, and other criminal activities.

Court filings highlighted that Rodriguez described the platform in a 2018 WhatsApp message as “money laundering for bitcoin,” while Hill promoted Whirlpool on the darknet forum Dread as a tool to make illicit funds “untraceable.”

What Services Were Used to Launder Funds

Samourai Wallet’s Whirlpool service coordinated batches of Bitcoin exchanges between users, while Ricochet added multiple intermediate “hops” to transactions to further conceal their origin.

Since their launch—Ricochet in 2017 and Whirlpool in 2019—more than 80,000 Bitcoin, valued at over $2 billion at the time, passed through these services, generating more than $6 million in fees.

Court documents indicate that the developers actively encouraged criminal use, even advising hackers in real time following a 2020 social media breach to launder stolen funds through the wallet.

Why the Sentencing Was the Maximum Allowed

Rodriguez had requested a sentence of one year and a day, while prosecutors pushed for the statutory maximum of five years.

Judge Cote agreed with the prosecution, emphasising the need to protect “the integrity of the financial system.”

By pleading guilty earlier this year to operating an unlicensed money-transmitting business, Rodriguez avoided potential decades-long sentences tied to the original money laundering conspiracy charge, which carries a maximum of 20 years in prison.

Alongside his prison term, the court imposed joint forfeiture of $237 million and restitution exceeding $6 million to be shared with Hill.

What Happens Next for His Co-Founder

William Lonergan Hill, Samourai Wallet’s CTO, remains scheduled for sentencing on 19 November 2025.

Prosecutors are expected to seek the same five-year maximum.

Both men were arrested in April 2024—Rodriguez in Texas and Hill in Portugal—and later extradited to the U.S.

Their plea deals reduced potential exposure to more serious money laundering charges but confirmed federal scrutiny on privacy-focused crypto platforms.

Is This Part of a Wider Federal Crackdown on Crypto Privacy Tools

The case against Samourai Wallet follows the August 2025 conviction of Tornado Cash co-developer Roman Storm on similar charges.

U.S. authorities have increasingly targeted privacy-enhancing platforms, arguing that unlicensed mixing services undermine anti-money-laundering frameworks and facilitate the movement of illicit funds across borders.

According to prosecutors, Rodriguez and Hill “knowingly facilitated criminal use of its platform,” framing this case as part of a broader push to regulate privacy-focused digital finance tools.

How Developers React to Increased Scrutiny

Rodriguez’s defence team maintained that Samourai Wallet was primarily a privacy-focused tool, used by some to trace stolen Mt. Gox funds through its open-source analytics platform, OXT.

They warned that the verdict could deter developers from building security and privacy tools in the future.

The ruling places privacy-enhancing protocol developers under heightened scrutiny, signalling that federal authorities may hold creators directly accountable for how their code is used.

Did This Case Redefine Boundaries Between Privacy and Regulation

By targeting the operators of Samourai Wallet, U.S. authorities have sent a clear message that unlicensed crypto services, even those marketed as privacy tools, may carry criminal liability.

Rodriguez’s sentencing represents a notable escalation in the government’s enforcement campaign, raising critical questions for the future of privacy innovation within the cryptocurrency sector.