ZoneBitcoin EditorialThe founders of a privacy-focused bitcoin wallet called Samourai Wallet were arrested by federal prosecutors on April 24. They are accused of money laundering and operating an unlicensed money transmitting business.
The US government is stepping up its efforts to crack down on tools that protect users' privacy. The reason given is that these tools are also used by criminals to hide their actions. Following the March 2024 conviction of the founder of " Bitcoin Fog", Roman Sterlingov, for money laundering, it is worth recalling that there is also an ongoing trial against the developer of Tornado cash, Alexey Pertsev, arrested on August 10, 2022 ( who will be sentenced to 60 months in prison in May 2024).
The accusations against the founders of Samourai Wallet
Samurai Wallet is a Bitcoin wallet that promised to “keep your transactions private and your identity hidden.” However, according to the press release from the Department of Justice, the service allegedly executed more than $2 billion in illicit transactions and laundered more than $100 million through illegal dark web marketplaces.
The founders, Keonne Rodriguez and William Hill, are accused of developing, marketing and operating Samourai Wallet. The charges against them relate to running an unlicensed money transmitting business and large-scale money laundering. The services which are affected are mainly linked to the functionalities of whirlpool and spouse which allow the confidentiality of transactions.
The arrests and measures taken by the authorities
Keonne Rodriguez, 35, was arrested on Wednesday April 24 and will be arraigned in Pennsylvania. William Hill, 65, technical director of Samourai Wallet, was arrested in Portugal and will be extradited to the United States to face charges.
Authorities seized Samurai Wallet's website and issued a warrant for the mobile app on the Google Play Store, effectively ending the service's operation for customers residing in the US.
It is important to know that Samourai users can restore their BIP39 compatible wallet to another wallet and can access it using their seed phrase if they were not running their own nodes. Documentation is available online here.
The implications for Bitcoin and the debate over the need for privacy
This crackdown on privacy tools will necessarily have significant implications on the Bitcoin ecosystem. The authorities seek to discourage the use of these services for illicit activities but could also mark a turning point in the quest for the protection of personal data.
This arrest sparked various comments from bitcoiners. Many of them point out that privacy is a fundamental right.
Some believe that transaction privacy is an essential aspect of blockchain technology, while others argue that cracking down on mixing tools is necessary to combat money laundering and other criminal activity.
Edward Snowden reacted to the arrest of the founders of Samourai Wallet by highlighting the need to make money private by default to maintain the privacy of financial data.
The arrest of the founders of Samourai Wallet marks an important step in the crackdown on tools providing user privacy. Authorities continue to pursue actors involved in illicit activities and increase regulation in the cryptocurrency sector.
This case raises important questions about the balance between transaction confidentiality and anti-money laundering.
Even more, in May 2024, the founder of Tornado cash was sentenced to 60 months in prison, going up the ever more severe path that justice takes regarding tools of this type...
