Samourai Wallet co-founder Keonne Rodriguez has been sentenced to five years in federal prison for operating an unlicensed Bitcoin mixing service, marking a major escalation in the U.S. government’s crackdown on cryptocurrency privacy tools. The sentencing, handed down by Judge Denise Cote in the Southern District of New York, also includes a $250,000 fine and three years of supervised release. Prosecutors argued that the wallet was intentionally designed to facilitate money laundering, enabling users to obscure the origins of over $237 million in criminal proceeds.
The Department of Justice (DOJ) presented evidence that Rodriguez, alongside co-founder William Lonergan Hill, created and promoted Samourai Wallet as a tool that would allow users to hide illicit transactions. The functionality of the wallet included a Bitcoin mixer, which combines multiple transactions to make tracing their origin more difficult. According to the DOJ, these services were used to funnel funds from darknet marketplaces, cyberattacks, and child exploitation networks.
In court filings, prosecutors cited multiple communications from Rodriguez and Hill that seemingly encouraged illegal activity. One such piece of evidence was a 2018 WhatsApp message in which Rodriguez allegedly referred to Bitcoin mixing as “money laundering for Bitcoin.” Online posts from Hill were also highlighted, including one where he claimed the wallet could “clean dirty Bitcoin.”
Rodriguez was arrested in Texas in April 2024, while Hill was detained in Portugal and later extradited to the United States. Both men reached a plea agreement in June 2025, avoiding a potential 20-year sentence for money laundering. Instead, they admitted to operating an unlicensed money transmission business and agreed to forfeit $237.8 million in profits. Hill’s sentencing is expected to take place in November 2025, with prosecutors pushing for the same five-year maximum sentence.
The ruling has reignited a contentious debate within the cryptocurrency community and legal circles: can privacy-enhancing technology exist within the framework of financial regulations? Rodriguez’s defense maintained that Samourai Wallet was not a criminal tool but rather a privacy-focused application intended to protect the identities of its users. They emphasized that its open-source analytics platform, OXT, had even been used to trace stolen Bitcoin from the infamous Mt. Gox hack.
Rodriguez’s legal team labeled the case a “war on privacy,” arguing that targeting developers of privacy tools sets a dangerous precedent. They warned that the decision could have a chilling effect on innovation, discouraging software engineers from building applications that enhance user anonymity and security.
This case mirrors the legal battle involving Tornado Cash developer Roman Storm, who was similarly convicted in 2025 for creating a crypto mixing protocol that U.S. authorities alleged facilitated money laundering. Together, these cases highlight a growing trend: U.S. regulators are increasingly holding software developers accountable for how their tools are used, especially when it comes to financial privacy.
The DOJ’s aggressive stance suggests a shift in how the U.S. approaches financial crime in the digital age. Instead of merely targeting end-users, the government is now focusing on the infrastructure and code that enable anonymous transactions. This approach raises complex legal and ethical questions, particularly around the responsibilities of open-source developers and the limits of code as free speech.
From a regulatory standpoint, the prosecution of Rodriguez and Hill underscores a broader push to bring all crypto-related services under the umbrella of traditional financial laws. This includes requiring licensing, Know Your Customer (KYC) protocols, and Anti-Money Laundering (AML) compliance—even for decentralized tools that claim not to be custodial or profit-driven.
For developers working in blockchain technologies, the message is clear: privacy features alone do not exempt a platform from legal scrutiny. Whether intentional or not, if a tool is widely used to conceal criminal activity, its creators may face prosecution.
At the same time, this legal pressure may stifle innovation in legitimate privacy technologies. In traditional finance, privacy is considered a right and is often legally protected. In crypto, however, privacy is increasingly framed as suspicious or criminal. This contrast highlights the unique challenges of regulating decentralized ecosystems without undermining their fundamental principles.
Users of crypto privacy tools are also left in a precarious position. Many turn to services like Samourai Wallet not to launder money, but to protect personal finance data from surveillance, theft, or censorship. However, with legal penalties now extending to developers and potentially even to users in certain cases, the risk of interacting with such tools has grown significantly.
The outcome of this case may influence pending legislation and international policy discussions, as governments worldwide attempt to strike a balance between individual privacy rights and the need for financial transparency. For now, the U.S. appears to be taking a hardline stance, positioning itself at the forefront of global efforts to rein in crypto’s anonymous capabilities.
As the crypto industry watches closely, a pressing question remains: can privacy and compliance truly coexist in a decentralized world? Or will the pursuit of financial anonymity always be at odds with state oversight? The answers may shape the future of digital finance for years to come.