The US government has taken down Samourai Wallet, a cryptocurrency mixing service that executed over $2bn in unlawful transactions and laundered over $100m in criminal proceeds.
In an April 24 press release, the US Department of Justice (DoJ) announced that Samourai’s web servers and domain were seized following a law enforcement operation in collaboration with Iceland’s authorities.
Additionally, the illegal cryptocurrency service’s Android app has been removed from the Google Play Store in the US.
Alongside the takedown, the DoJ revealed that Samourai’s two co-founders, CEO Keonne Rodriguez and CTO William Lonergan Hill, have been charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business.
US Attorney Damian Williams commented: “As alleged, Rodriguez and Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2bn in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering.
“Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100m of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns.”
Rodriguez and Hill were arrested on April 24 in the US and Portugal, respectively.
What the Samourai Wallet Offered Criminals
Samourai Wallet was a mobile-first cryptocurrency mixing service combining multiple features to execute anonymous financial transactions.
The application, operational since 2015, has been downloaded over 100,000 times.
After users downloaded Samourai, they could store their private keys for any Bitcoin addresses they controlled inside the Samourai program.
These private keys were not shared with Samourai employees, but Samourai operated a centralized server that, among other things, supervised and facilitated transactions between Samourai users and created new Bitcoin addresses used during the transactions.
Samourai features included ‘Whirlpool,’ a cryptocurrency mixing service that coordinated batches of cryptocurrency exchanges between groups of Samourai users to prevent tracing of criminal proceeds by law enforcement on the blockchain, and ‘Ricochet,’ which allowed a Samourai user to build in additional and unnecessary intermediate transactions (known as “hops”) when sending cryptocurrency from one address to another address.
Samourai was used by customers all over the world, including customers located in the Southern District of New York, where the indictment took place.
“While offering Samourai as a ‘privacy’ service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion. Indeed, as the defendants intended and well knew, a substantial portion of the funds that Samourai processed were criminal proceeds passed through Samourai for purposes of concealment,” the DoJ said.
