US Strikes Again! Founder of Cryptocurrency Mixer Samourai Arrested, Snowden Criticizes: Infringement of Financial Privacy

The US Department of Justice announced on the 24th the arrest of Keonne Rodriguez, CEO of cryptocurrency mixer Samourai Wallet, and CTO William Hill. Both face charges of conspiracy to commit money laundering, punishable by up to 20 years in prison, and conspiracy to operate an unlicensed money transmission business, punishable by up to 5 years in prison.

According to Cointelegraph, Keonne Rodriguez was arrested in Pennsylvania on the 24th, while William Hill was arrested in Portugal on the same day. The US will seek the extradition of William Hill, as stated by the Southern District of New York US Attorney's Office.

Samourai Wallet's servers and domain in Iceland have been seized, and the prosecution has issued a ban on downloading the Samourai App from the Google Play Store. The app has been downloaded over 100,000 times.

The US Department of Justice alleges that Samourai Wallet facilitated over $2 billion in illegal transactions and facilitated over $100 million in money laundering transactions on illegal darknet markets such as Silk Road and Hydra Market. Additionally, they are accused of hacking into servers and executing phishing scams on DeFi protocols.

Samourai Wallet created additional, unnecessary transactions through protocols like Whirlpool and Ricochet to obfuscate the flow of user funds, reportedly earning $4.5 million in fees.

Snowden Advocates for Privacy Protocols

In recent years, the US government has frequently targeted privacy protocols. The US Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned Blender.io in May 2022, and then added Tornado Cash to the sanctions list in August of the same year, prohibiting US residents from using the service and arresting one of its co-founders. In October 2023, following Hamas attacks on Israel, the US Treasury's Financial Crimes Enforcement Network proposed classifying cryptocurrency mixers as "primary money laundering concerns," requiring domestic financial institutions to "implement certain recordkeeping and reporting requirements" for transactions involving mixers.

Following the indictment of Samourai Wallet, Edward Snowden, a former NSA employee who exposed the US global surveillance program in 2013, tweeted his criticism:

"Once again, the Department of Justice criminalizes developers who restore financial privacy applications. The solution to this problem is to default to privatizing money, where privacy cannot be the exception, or it becomes criminal."