The US government has taken down Samourai Wallet, a cryptocurrency mixing service implicated in facilitating more than 2 billion in unauthorized transactions and laundering over 100 million in criminal proceeds.
According to a press release from the US Department of Justice (DoJ) on April 24, the seizure of Samourai’s web servers and domain was part of a law enforcement operation conducted in collaboration with Icelandic authorities. Moreover, the illicit cryptocurrency service’s Android app has been removed from the Google Play Store in the US.
As part of the crackdown, the DoJ revealed that Samourai’s two co-founders, CEO Keonne Rodriguez and CTO William Lonergan Hill, are facing charges related to conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business.
US Attorney Damian Williams commented, “Rodriguez and Hill stand accused of creating, promoting, and managing Samourai, a cryptocurrency mixing service that facilitated over $2 billion in unauthorized transactions, offering criminals a secure platform to carry out extensive money laundering activities.”
The arrests of Rodriguez and Hill took place on April 24 in the US and Portugal, respectively.
Samourai Wallet’s Offerings to Criminals
Samourai Wallet operated as a mobile-focused cryptocurrency mixing service providing tools for anonymous financial transactions.
Established in 2015, the platform has attracted over 100,000 downloads.
Upon installation, users could securely store their private keys for Bitcoin addresses within the Samourai application. While Samourai did not have access to these private keys, it managed a centralized server overseeing transactions among users, creating new Bitcoin addresses for transactions.
Key features of Samourai included ‘Whirlpool,’ a cryptocurrency mixing service that conducted batch cryptocurrency exchanges among groups of users to prevent the tracking of criminal proceeds on the blockchain. Additionally, ‘Ricochet’ allowed users to introduce extra intermediary transactions (“hops”) when transferring cryptocurrency between addresses.
Samourai drew clients globally, including individuals in the Southern District of New York, where the indictment was filed.
Despite marketing itself as a ‘privacy’ service, the defendants were aware that Samourai served as a haven for criminals to engage in extensive money laundering and sanctions evasion. The DoJ highlighted that a substantial amount of the funds processed by Samourai constituted illicit proceeds channeled through the platform to obscure their origins.