The recent takedown of Samourai Wallet by the US government has sent shockwaves through the cryptocurrency community. The popular mixing service, which facilitated over $2bn in unlawful transactions and laundered more than $100m in criminal proceeds, has been shut down following a joint operation with Iceland’s authorities.
In a press release issued by the US Department of Justice on April 24, it was revealed that Samourai’s web servers and domain were seized, and the Android app was removed from the Google Play Store in the US. The co-founders of Samourai Wallet, CEO Keonne Rodriguez and CTO William Lonergan Hill, have been charged with conspiracy to commit money laundering and operate an unlicensed money-transmitting business.
US Attorney Damian Williams stated, “Rodriguez and Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that served as a haven for criminals to engage in large-scale money laundering. They knowingly facilitated the laundering of over $100m of criminal proceeds from various illegal activities.”
Both Rodriguez and Hill have been arrested in the US and Portugal, respectively. The takedown of Samourai Wallet has shed light on the dark underbelly of cryptocurrency transactions and the role played by such services in facilitating illegal activities.
Samourai Wallet, which has been operational since 2015 and downloaded over 100,000 times, offered users a mobile-first cryptocurrency mixing service. Users could store their private keys for Bitcoin addresses within the Samourai program, with the application’s centralized server facilitating transactions between users.
The features of Samourai Wallet included ‘Whirlpool,’ a cryptocurrency mixing service that prevented tracing of criminal proceeds on the blockchain, and ‘Ricochet,’ which added unnecessary intermediate transactions when sending cryptocurrency. The service was used by customers worldwide, including those in the Southern District of New York where the indictment took place.
While marketed as a ‘privacy’ service, Samourai Wallet was, in reality, a haven for criminals to launder money and evade sanctions. The DoJ emphasized that a significant portion of the funds processed by Samourai were criminal proceeds used for concealment.
The takedown of Samourai Wallet underscores the need for stricter regulations in the cryptocurrency space to prevent such services from being exploited for illegal activities. It serves as a warning to other similar platforms that may be facilitating criminal transactions and highlights the importance of law enforcement collaboration in combating financial crimes in the digital age.