Samourai Wallet: A New Threshold in U.S. FinCrime Enforcement
On July 30, 2025, the co-founders of Samourai Wallet, Keonne Rodriguez (CEO) and William Lonergan Hill (CTO), pled guilty in the U.S. District Court for the Southern District of New York to one count of conspiracy to operate an unlicensed money-transmitting business under 18 U.S.C. § 1960.
As reported by CryptoSlate, prosecutors agreed to dismiss all related laundering and conspiracy charges, leaving §1960 as the sole conviction.
The case revolves around Samourai Wallet privacy-focused features—Whirlpool (a Bitcoin mixing service) and Ricochet (an extra-hop obfuscation tool)—which U.S. authorities say were intentionally designed to facilitate illicit fund movement, including flows tied to darknet markets, hacks, and crypto-fraud schemes.
Key Facts and Legal Framework
Samourai Wallet’s Features
Samourai launched around 2015 as a non-custodial Bitcoin wallet offering enhanced anonymity through:
- CoinJoin mechanisms
- Transaction-mixing
- Obfuscation hops
Two core services triggered prosecution:
- Whirlpool (2019) – a coordinated mixing pool obscuring transaction origins
- Ricochet (2017) – adding intermediary hops to make tracing harder
According to filings on Justice.gov, more than 80,000 BTC (over $2B at peak value) passed through these services, including funds from criminal marketplaces.
Applicable U.S. Law
Unlicensed Money Transmission – 18 U.S.C. § 1960
The Government treats many mixers as money-transmitting businesses (MTBs) if they:
- Transmit funds for the public
- Facilitate transfers of criminal proceeds
- Charge fees while operating as a business
Even non-custodial tools may be captured depending on how actively they facilitate transmissions.
Money-Laundering & Conspiracy
Although these charges were dismissed, their inclusion shows prosecutors viewed Samourai’s services as knowingly enabling the flow of illicit proceeds.
FinCEN Guidance – Regulatory Ambiguity
While FinCEN’s 2019 guidance indicates anonymizing software alone is not necessarily a money-transmitting business, prosecutors argued Samourai’s tools operated as a commercial service, not just code.
This regulatory gap remains unresolved because the guilty plea avoids judicial precedent.
Reference: FinCEN Guidance
Legal Analysis: When Does Wallet Software Become a Money-Transmitting Business?
This case highlights core legal questions facing crypto developers and privacy-enhancing tools:
1. Tool vs. Service
If software actively facilitates, coordinates, or manages users’ fund movements—especially through mixing—it may be considered a “service,” not a neutral tool.
2. Revenue Model
Samourai collected mixing fees, strengthening the Government’s argument that it operated a business.
3. Knowledge of Illicit Use
Private communications referenced “money laundering for bitcoin,” which prosecutors viewed as evidence of knowing facilitation.
4. Public Access
Samourai’s tools were openly available to the public, further supporting the “operating as a business” element under §1960.
5. Non-Custodial ≠ Risk-Free
Courts have never formally ruled that non-custodial mixers fall outside transmission laws—and now, because the case ended in a plea, the question remains legally unresolved.
Implications for Privacy Tools, Mixers, and Developers
This case delivers several warnings:
- Non-custodial status is not enough
U.S. authorities may still classify such projects as money transmitters if they facilitate transactions. - Marketing matters
Statements implying a tool is intended to “clean” Bitcoin or avoid law-enforcement tracing can become evidence. - Open-source is not immunity
Prosecutors care about functionality, revenue, and intent—not the license type. - Expect cross-border enforcement
Samourai involved cooperation with Europol, IRS-CI, and foreign governments, showing global reach.
Strategic Guidance for Crypto Lawyers & Blockchain Projects
- Assess whether your software crosses into “service” territory
If there is mixing, coordinated routing, or fee-based anonymization, consider MSB/MTB licensing obligations. - Build compliance from day one
AML risk assessments, logging policies, and jurisdictional reviews are essential. - Avoid language suggesting illicit use
Public and private communications are discoverable evidence. - Consider restructuring privacy features
Tools should be user-controlled rather than operator-directed. - Document legitimate use cases
Privacy is lawful—but evidence of mixed intentions is risky. - Seek regulatory clarity early
Consider pre-emptive discussions or no-action letters with regulators where possible.
Broader Industry Impact
- The case signals a shift toward criminal enforcement against developers of privacy-enhancing crypto tools.
- It increases uncertainty around mixers and CoinJoin implementations.
- It places greater responsibility on developers to justify privacy features as legitimate—not illicit.
- It may discourage innovation unless legal frameworks evolve.
- It underscores the urgent need for clearer FinCEN, DOJ, and congressional guidance on what constitutes a money-transmitting service in decentralized systems.
Conclusion
The Samourai Wallet guilty plea is a landmark in crypto-law enforcement, signaling that:
- Developers of privacy/mixing tools are now a primary regulatory target.
- Non-custodial architecture does not guarantee legal safety.
- Prosecutors will look at functionality, intent, fees, and knowledge—not just software structure.
For the crypto industry, the message is unambiguous:
Design for privacy—but engineer for compliance.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal or financial advice.
Author & Crypto Consultant
Shahid Jamal Tubrazy (Crypto & Fintech Law Consultant)
Shahid Jamal Tubrazy, a certified top expert in Crypto Law from Duke University, is a leading authority in the cryptocurrency and blockchain space. As a seasoned Fintech lawyer, he offers a full spectrum of services, including licensing, legal guidance for ICOs, STOs, DeFi, and DAOs, as well as specialized expertise in crypto mediation, negotiation, and mergers and acquisitions. With a proven track record and published works on Blockchain Regulation and Cryptocurrency Laws, Shahid provides unparalleled insights into the complexities of the fintech world, ensuring compliance and strategic success. 🌐💼 #CryptoLaw #Fintech #Blockchain #LicenseServices #CryptoMediator #MergersAndAcquisitions #CryptoCompliance #FrozenAssetsrecovery.
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