A federal judge has sentenced Samourai Wallet Co-Founder, Keonne Rodriguez, to five years of prison for operating an illegal crypto-mixing service that handled more than $200 million in criminal proceeds. According to court records from the Southern District of New York, the 37-year-old developer has also been ordered to pay $250,000 and surrender to federal custody.

After Rodriguez’s confession regarding his participation in the conspiracy to operate an unauthorized money-transferring business, Judge Denise Cote handed down the sentence. The judge described it as a major crime and added that the sentence would be a part of an overall strategy aimed at preventing unrelenting criminals from making use of the tempting crypto systems to commit different offenses.

The hearing witness Cote voiced that she would regard Rodri­guez’s letter to the court as a factor that could hurt the case, stressing that it did not indicate the defendant’s awareness of his crime at all. Rodriguez expressed through his writing that he was trying to secure the privacy of the financial transactions; however, the judge countered that the provision had turned into a place of refuge for the criminals who were using the virtual currency to conceal their gains.

Cote told the court that Rodriguez’s conduct amounted to deliberate, antisocial behavior. She said his statement of purpose did not reflect the reality of what Samourai Wallet enabled.

“Everyone values financial privacy,” she said, “but that is not what this was about.” The judge added that Rodriguez’s letter overlooked the harm caused to victims of fraud, drug trafficking, and cybercrime linked to the platform.

They said the plan showed premeditation and awareness. “He encouraged hackers, sanctions evaders, and other criminals to use his tool,” prosecutors told the court. They argued that his letter offered no sign of remorse or recognition of the damage caused.

According to court records, prosecutors connected the wallet’s services to money derived from illegal sources. The funds allegedly came from darknet marketplaces, drug trafficking, cyber intrusions, fraud operations, and a child pornography website. Prosecutors described the activities as intentional and unlawful.

Rodriguez and fellow developer William Lonergan Hill were arrested in April. Both faced two charges: conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. In July, they reached a plea deal with prosecutors. Under the agreement, both developers pleaded guilty to the unlicensed transmitting charge. The money laundering conspiracy charge, which carried a 20-year maximum sentence, was dropped as part of the deal.

Sources: https://x.com/innercitypress/status/1986476561436983727

and https://blockonomi.com/samourai-wallet-developer-sentenced-to-five-years-in-federal-prison