The co-founder of Samourai Wallet, a leading privacy-focused crypto platform, has been sentenced to four years in federal prison a case that underscores how aggressively the U.S. government is now targeting cryptocurrency privacy tools.
According to new court filings dated Nov. 19, William Hill received a four-year sentence for operating an unlicensed money-transmitting business. Hill’s co-founder, Keonne Rodriguez, was previously sentenced to five years earlier this year.
Why the sentence was reduced
Hill’s sentence was lighter than his co-founder’s in part because of mitigating factors cited by prosecutors including his age and a recently confirmed autism diagnosis. Both co-founders had been arrested in July 2024.
As part of a plea agreement reached in July, Hill and Rodriguez admitted guilt to conspiracy charges related to running an unlicensed money-transmission operation. In exchange, prosecutors dropped separate money-laundering charges that initially threatened much harsher penalties.
How Samourai Wallet became a DOJ target
The Justice Department says Samourai Wallet facilitated more than $237 million in illegal transactions tied to darknet markets, hacked funds, and other criminal activity. Prosecutors argued that the founders intentionally designed Samourai’s privacy features including Whirlpool, a coin-mixing tool, and Ricochet, which adds extra hops to transactions to help users hide the flow of illicit money.
Court documents described Samourai Wallet as an “end-to-end laundering pipeline,” even though the platform did not hold user deposits or operate as a custodial service.
Legal experts believe this ruling could shape the future of regulation around blockchain privacy tools. Even though Samourai technically never controlled user funds, the intent and design of its privacy tools were central to the government’s case a point that could influence several pending legal battles in the crypto privacy space.
Part of a wider federal crackdown
Hill’s sentencing is one more chapter in an escalating U.S. crackdown on crypto mixers and privacy tech often used by cybercrime groups such as North Korea’s Lazarus Group.
Recent cases include:
- The conviction of Roman Sterlingov, founder of Bitcoin Fog, accused of helping facilitate over $400 million in illegal drug sales
- Federal charges against Tornado Cash developers Roman Storm and Roman Semenov
- U.S. sanctions against major mixers such as Blender and Sinbad
As regulators sharpen their focus, the future of privacy-preserving crypto applications remains uncertain and this latest ruling adds even more pressure to an already heavily scrutinized corner of the industry.
