Samourai Wallet Founders to Change Not Guilty Plea
Keonne Rodriguez and William Lonergan Hill, the co-founders of Samourai Wallet, have indicated they will change their previous not guilty plea regarding charges related to their involvement in the crypto mixing protocol.
According to filings submitted to a New York federal court on Tuesday, Rodriguez and Hill are scheduled to appear in court on Wednesday morning to formally change their pleas.
Initially, in April 2024, the pair pleaded not guilty to charges of operating an unlicensed money-transmitting business. Prosecutors alleged that Samourai Wallet processed over $2 billion in unlawful transactions, including those linked to illicit marketplaces such as Silk Road.
Potential Penalties for Samourai Co-Founders
Rodriguez, who served as CEO, and Hill, the CTO, face serious charges. The conspiracy to commit money laundering charge carries a maximum prison sentence of 20 years. Additionally, operating an unlicensed money-transmitting business carries a five-year sentence. This means the co-founders could potentially face up to 25 years in prison.
Judge Denise Cote has scheduled hearings to address the change of pleas. The specific implications of this change on their sentences remain unclear. The trial had been initially set for November 3.
Background on the Samourai Wallet Case
Before deciding to change their plea, Rodriguez and Hill had attempted to dismiss the case in early April. They cited a memo suggesting the Department of Justice would not prosecute crypto mixer operators for unwitting regulatory violations.
Furthermore, Samourai’s legal team alleged that federal prosecutors withheld information indicating the company did not require a money transmitting license.
Samourai, like other crypto mixers, combined funds from various users to obscure their origins. This case is part of a broader scrutiny of crypto privacy tools.
Industry Context: Tornado Cash and Regulatory Scrutiny
The change of plea occurs amid the trial of Roman Storm, a creator of Tornado Cash, another crypto mixer. Storm faces charges of conspiracy to commit money laundering and sanctions violations, potentially leading to a 45-year prison sentence if convicted on all counts.
The outcome of Storm’s case could set a precedent for how open-source privacy tools are treated legally, with significant implications for decentralized finance and privacy rights.
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