Key Highlights
- •Samourai Wallet co-founder Keonne Rodriguez was sentenced to five years in federal prison for operating an unlicensed money-transmitting business.
- •Judge Denise Cote stated the maximum sentence was necessary for accountability and deterrence within the crypto industry.
- •Prosecutors alleged the wallet was used to conceal over $237 million in illicit Bitcoin transactions, including funds from darknet markets.
In a case that has garnered significant attention from the cryptocurrency community, Keonne Rodriguez, the co-founder of the privacy-focused Bitcoin app Samourai Wallet, has received a five-year federal prison sentence.
He was found guilty of assisting in the operation of an unlicensed money-transmitting business, a charge stemming from a multi-year investigation into the wallet's use for concealing illegal transactions.
The sentence, handed down by U.S. District Judge Denise Cote in Manhattan on Thursday, represents the maximum penalty for the offense and highlights the Justice Department's increasingly stringent approach to crypto-mixing services.
Judge Imposes Maximum Sentence
Judge Cote determined that the gravity of Rodriguez's offenses warranted the full five-year term, characterizing his actions as "very serious, anti-social criminal behavior."
During the approximately hour-long hearing, Cote remarked that the defendant engaged in "very serious, anti-social criminal behavior" over several years. She added, "He identifies his motivation here as a desire to protect financial privacy. That’s fine, that’s good. We all want financial privacy. But I don’t think that’s really what was at stake here… There is no acknowledgement in that letter of the criminal world for whom digital currency is a gift."
Judge Cote expressed concern that Rodriguez's letter to the court failed to demonstrate full accountability, stating, "He says his mistake was not getting a license — that misses the point."
Prosecutors contended that Rodriguez knowingly facilitated money laundering for cybercriminals, drug traffickers, and fraudsters by leveraging Samourai Wallet's privacy-enhancing features.
According to court filings, the Samourai Wallet platform enabled criminals to obscure the origins of over $237 million in illegal Bitcoin transactions. These funds were linked to darknet drug markets, online scams, and even a website involved in child exploitation.
The prosecution also brought up the Nirvana hack as one of the transactions processed by Samourai, asserting that Rodriguez was aware of criminals and sanctions evaders using the service as early as 2015.
Judge Cote emphasized that the imposition of the full five-year sentence was intended to hold Rodriguez accountable and to serve as a clear message to others in the cryptocurrency sector. She acknowledged the importance of financial privacy but stressed that it cannot be used as a pretext for concealing illicit funds or aiding criminal activities.
Background: The Samourai Wallet Case
Launched in 2015, Samourai Wallet was developed with the aim of enhancing financial privacy for Bitcoin users in an environment where most online payments are easily traceable. The app, which was available on the Google Play Store, accumulated over 100,000 downloads before its removal following the founders' arrests in 2024.
Key features of the app included "Ricochet," a function that routed Bitcoin through multiple intermediary wallets to obfuscate its final destination, and "Whirlpool," a crypto mixing service designed to combine users' Bitcoin transactions to obscure their origins.
While privacy advocates lauded these tools as crucial for maintaining user anonymity on the public Bitcoin blockchain, prosecutors argued that they became a refuge for criminals. Court documents indicate that Samourai Wallet's features processed more than $2 billion worth of Bitcoin, with approximately $250 million associated with illegal activities.
In a 2018 WhatsApp conversation presented in court, Rodriguez reportedly described the mixing process as "money laundering for Bitcoin." Prosecutors also referenced online forums, such as Dread, a dark web platform, where co-founder William Lonergan Hill allegedly marketed Samourai's services to individuals seeking to "clean dirty BTC."
Plea Deal and Financial Penalties
Rodriguez, aged 37, and Hill were apprehended in April 2024, initially facing charges of conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business. Both individuals faced a potential maximum sentence of 20 years in prison if convicted of money laundering.
However, in July 2025, they entered into an agreement with federal prosecutors and pleaded guilty to the lesser charge of operating an unlicensed money-transmitting business, which carries a maximum sentence of five years.
As part of their plea agreement, Rodriguez and Hill consented to forfeit $237 million and pay a $400,000 fine. Additionally, the court mandated $6 million in restitution, representing the estimated profits derived from the illicit operation.
During the sentencing, Judge Cote imposed an additional $250,000 fine on Rodriguez. She ruled that 20% of his gross monthly income during his supervised release would be allocated towards paying off this fine. He is also subject to three years of supervised release following the completion of his prison term.
Rodriguez was permitted to remain free on bail until his scheduled prison surrender date on December 19, 2025.
Defense Pleads for Leniency
Rodriguez's defense team, spearheaded by attorney Michael Kim Krouse, implored the court for leniency, requesting a sentence of one year and one day. They argued that Rodriguez was motivated by principles of financial privacy and had no prior criminal record.
Krouse wrote in a letter to the court, "Both before and after his arrest, Mr. Rodriguez selflessly used his computer coding skills and blockchain tracing abilities to help victims of cryptocurrency theft recover their funds. Mr. Rodriguez did not set out to create a tool that would be used to commit money laundering."
Addressing the judge directly at the hearing, Rodriguez stated, "I am truly sorry, and I understand the seriousness of my crime. I am remorseful. I can say, truly, that I will never break the law again. This experience has been dreadful."
However, Judge Cote remained unconvinced, remarking that his letter to the court indicated he was still operating "with moral blinders on." She added, "You may be kind to strangers, but if they are victimized, you chose to use your considerable talent to make it hard to recoup."
Prosecutors: "He Knew What He Was Doing"
Prosecutors asserted that Rodriguez and Hill were not only aware that criminals were utilizing Samourai to conceal illicit transactions but actively encouraged such use to increase revenue.
In their sentencing memorandum, prosecutors wrote, "To generate revenue, boost Samourai’s business, and earn millions of dollars in fees, Rodriguez and Hill repeatedly solicited, encouraged, and invited criminals to use Samourai to conceal their transfers of criminal proceeds."
They also cited an alleged "escape plan" discovered at Rodriguez's residence, which detailed the use of burner phones, cash-only motels, and back roads to evade law enforcement, presenting this as evidence that he was aware of his illegal activities.
Crypto Privacy on Trial
The case has been closely observed by cryptocurrency privacy advocates, who view it as part of a broader governmental effort to curb tools designed to protect anonymity on public blockchains.
Rodriguez's sentencing follows that of Roman Storm, co-founder of another crypto mixer, Tornado Cash. Storm was convicted in August of conspiring to operate an unlicensed money-transmitting business, after a jury could not reach a verdict on related money-laundering and sanctions charges.
Legal analysts suggest that both cases signify a critical juncture in the U.S. government's stance on digital privacy tools, drawing a more distinct boundary between legitimate privacy technology and its facilitation of criminal activity.
Rodriguez's co-founder, William Lonergan Hill, is scheduled for sentencing on November 19 before the same judge.
Defense attorney Sam Bassett commented, "The imposition of the maximum sentence seems appropriate given the money involved."