- A U.S. federal court has sentenced Samourai Wallet co-founders William Hill and Keonne Rodriguez to a combined nine years in prison.
- According to the prosecutors, the duo intentionally built advanced privacy tools on Samouria to help criminals hide stolen or illegally earned Bitcoin from law enforcement.
The United States federal court has sentenced the co-founders of Samourai Wallet, William Hill and Keonne Rodriguez, to a combined 9 years in prison for operating a crypto-mixing service that helped criminals hide illegal money. For Hill, he received four years in prison, while Rodriguez was sentenced to five years.
According to the U.S. Attorney’s Office for the Southern District of New York, the two men made use of Samouria move over $237 million that was later linked to criminal activities. In fact, the authorities went on to explain that the duo built their whole system to hide money from law enforcement and also make it very difficult to track any stolen or illegally earned Bitcoin.
How the Samouria Wallet Operated
According to a report well documented by the prosecutors, the two men started working on Samourai Wallet around 2015, and according to the details, the platform initially presented it as a privacy-focused Bitcoin tool. However, as the years continued to pass, they transformed what was supposed to be a Bitcoin help tool into a system designed to help criminals avoid security detection.
The wallet, just as expected, became a hub for people who were involved in drug trafficking, online hacking, darknet marketplace transactions, and other types of fraud. Investigators also added that in all of these, the founders were fully aware of who was using their tools and what the money was linked to, and instead of stopping the illegal users, they created even more advanced features to help them hide their tracks.
How the Founders Used Whirlpool and Ricochet to Build the Criminal Platform
During the course of platform’s existence, Samourai Wallet relied heavily on a mixing tool called Whirlpool. Basically, this tool helped to collect Bitcoin transactions from many users and merged them into large groups and then redistributed this Bitcoin in such a way that it concealed the original source.
This method made it almost impossible for anyone, even the experienced blockchain analysts, to trace the money back to where it actually came from. The Samouria wallet also used another feature called Ricochet, where one adds a number of extra transactions in between the sender and receiver. These extra steps created more confusion on the blockchain, and by doing that, they blocked investigators from connecting the money to specific crimes.
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From the time Ricochet launched in 2017 and Whirlpool started operating in 2019, more than 80,000 Bitcoin passed through these systems. So Samouria acted as a middleman and then charged people for using both tools, and the founders earned more than $6 million in fees from the constant flow of hidden transactions.
The government stated that the large volume of money moving through these services clearly showed how much the platform was involved in laundering criminal funds. Investigators also revealed that the founders were public about the services they ran, and so they actively promoted their services to people carrying out illegal activities.
Hill, for instance, advertised Samourai Wallet on Dread, a well-known darknet forum where criminals discuss ways to hide money and trade illegal goods. In one conversation, a user asked about the safest way to wash stolen Bitcoin so it could be used without raising any form of suspicion. Hill directly recommended Samourai’s mixing service as a better option than other tools on the market. Rodriguez also did the same publicly on Twitter when hackers attacked a major social media company.
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