2026-09-16 · Illicit Finance
Two developers went to prison for running a bitcoin mixer, and one of them received the statutory maximum for the only count left after the plea. The government’s own releases describe what their software did in detail and never once say it held anybody’s money.
Key findings
- Keonne Rodriguez’s five-year sentence is the statutory maximum for the single count he pleaded to. The count carries a five-year cap, and the money laundering counts that carry twenty were dropped in the plea.
- The two headline figures are not the same figure and coverage treats them as one. $237,832,360.55 is the criminal-proceeds forfeiture order. The “over $2 billion” is total volume through the services. Roughly 12% of throughput was identified as criminal proceeds.
- The amount actually paid was $6,367,139.69, which corresponds to the fee revenue, not to the forfeiture order.
- Neither the plea release nor the sentencing release states that Samourai held custody of user funds. The charge is transmitting without a license, and custody is absent from the government’s own account of what the software did.
- This puts Samourai beside Tornado Cash rather than beside Helix, and it is the closest thing to an answer since Van Loon on whether writing this software is a crime.
Case file
| Field | Value |
|---|---|
| Matter | United States v. Keonne Rodriguez and William Lonergan Hill |
| Court | S.D.N.Y., Judge Denise L. Cote |
| Docket | 1:24-cr-00082 |
| Pleaded | 30 July 2025, each to one count of conspiracy to operate a money transmitting business knowing it transmitted crime proceeds |
| Statutory maximum | Five years on that count |
| Sentences | Rodriguez 5 years, 6 November 2025. Hill 4 years, 19 November 2025 |
| Volume through the services | Over 80,000 BTC, over $2 billion at contemporaneous rates |
| Criminal proceeds | Over $237 million |
| Forfeiture ordered | $237,832,360.55 |
| Forfeiture paid | $6,367,139.69 |
| Fee revenue | Estimated over $6 million |
| Posture as of 3 August 2026 | Both sentenced. No appeal verified on the sources read |
What the record shows
What did Rodriguez and Hill plead guilty to?
Keonne Rodriguez and William Lonergan Hill, the chief executive and chief technology officer of Samourai Wallet, each pleaded guilty on 30 July 2025 to one count of conspiracy to operate a money transmitting business knowing the business transmitted crime proceeds, before U.S. District Judge Denise L. Cote in the Southern District of New York. That count carries a statutory maximum of five years.
They did not plead to money laundering. The plea resolved the case on the transmitting count alone, and the forfeiture agreed was $237,832,360.55.
On 6 November 2025 Judge Cote sentenced Rodriguez to five years. On 19 November 2025 she sentenced Hill to four years. Rodriguez’s sentence is the maximum the count allows.
What did Whirlpool and Ricochet actually do?
The government describes two services.
Whirlpool “coordinated batches of Bitcoin exchanges between groups of Samourai users. Through this process, the original source of particular Bitcoin holdings became obscured within the blockchain’s transactional record.”
Ricochet “enabled users to introduce additional and unnecessary intermediate transactions, known as ‘hops,’ between sending and receiving addresses”, which the government says made it substantially more difficult to establish connections between them.
Over 80,000 bitcoin, worth over $2 billion at contemporaneous rates, passed through these services, and the operators collected an estimated $6 million in fees.
Which figure is which
Three numbers circulate in coverage of this case and they measure different things.
| Figure | What it is |
|---|---|
| Over $2 billion | Total value of all bitcoin passing through Whirlpool and Ricochet |
| $237,832,360.55 | Criminal proceeds identified, and the forfeiture ordered |
| $6,367,139.69 | Forfeiture actually paid, corresponding to fee revenue |
| Over $6 million | Estimated fees the operators collected |
The government identified roughly 12% of throughput as criminal proceeds. Reporting that compresses this into “$2 billion laundered” overstates the finding by about eight times. The forfeiture order and the sum paid differ by a factor of thirty-seven, which is ordinary in forfeiture practice and is not a discount.
What the proceeds were
The government lists the categories of criminal proceeds transmitted: illegal dark web market proceeds, cyber intrusion proceeds, spear phishing scheme proceeds, decentralized finance protocol fraud proceeds, cryptocurrency theft proceeds, drug trafficking proceeds, and social media platform hack proceeds.
What the government does not say
Neither the plea release of 30 July 2025 nor the sentencing release describes Samourai Wallet as holding, controlling, or taking custody of user funds. The offense charged is operating a money transmitting business without the required registration, knowing it carried crime proceeds. Custody does not appear in the government’s account of how Whirlpool or Ricochet worked.
That absence is not a gap in the reporting. It is the feature of this case that separates it from every custodial mixer prosecution that came before it.
The coverage disagrees with the primary on who got what
Several outlets report the sentences the other way round, giving Rodriguez four years and Hill five. IRS Criminal Investigation, which is the charging agency, gives Rodriguez five years on 6 November 2025 and Hill four years on 19 November 2025. The primary is used throughout this article and the discrepancy is noted here rather than resolved silently.
Cite as: Max Avery, “Samourai Wallet: prosecuting software that never held the coins”, maxavery.org, 16 September 2026. Primary sources: IRS Criminal Investigation releases on the guilty pleas (30 July 2025) and the sentencings (6 and 19 November 2025).
What I think is going on
The interesting question in this case is not whether mixing bitcoin for drug traffickers is a crime. It plainly can be. The interesting question is what the defendants were actually convicted of doing, and the answer is narrower and stranger than the headline.
Samourai Wallet was, on the government’s own description, software. Users ran it. It coordinated batches of transactions between those users and it added hops between addresses. At no point in either release does the government assert that the operators took possession of a single coin. They took fees, about $6 million of them, and they ran the coordination.
Set that against the statute. The offense is operating a money transmitting business. The whole weight of the prosecution rests on the proposition that coordinating other people’s transactions, without ever holding the funds, is transmitting them. That is a real legal position and it is not an absurd one, but it is a position, and it was never tested here because the case ended in a plea. The government offered a five-year count, dropped the twenty-year laundering counts, and the question of whether non-custodial software transmits money went unlitigated.
Compare the neighbors. Helix and Bitcoin Fog took custody: users sent coins in, the operator sent different coins out, and the operator had them in between. Larry Harmon ran Helix and the Harmon prosecutions turned on control of actual keys to actual wallets. That is money transmission on any reading. Tornado Cash is the other pole: immutable contracts, no operator custody, and a sanctions designation that the Fifth Circuit rejected in Van Loon on the ground that immutable smart contracts are not property that can be blocked. The sanctions arc ran from designation to delisting without ever answering the criminal question.
Samourai sits between them and, on the government’s own facts, much nearer Tornado Cash.
Here is my read on why it ended in a plea. A trial would have forced a jury instruction on whether a non-custodial coordinator is a transmitter. Whichever way that instruction went, one side got an appellate issue worth years. The government offered terms that avoided it. The defendants, facing twenty-year counts, took a five-year cap. Both sides bought certainty and the rest of us lost the ruling.
And then Judge Cote gave Rodriguez the entire five years. That is worth sitting with. A defendant who pleads, cooperates with the resolution, and accepts a capped count usually gets something for it. Receiving the statutory maximum on the count you pleaded to suggests the court thought the cap was the constraint rather than the measure. Hill, sentenced two weeks later, got four.
What this changes for anyone building: the operative question is no longer whether you hold customer funds. It is whether you are in the path of a transaction and take a fee for being there. Samourai’s developers were not custodians on the government’s own description, and they are in prison. Until a court of appeals says otherwise, the safe assumption is that “we never touch the coins” is a defense you would have to win rather than a fact that keeps you out of the indictment.
What reduces your exposure
A privacy tool is not a custodian, so the usual structural answers do not reach this. What follows is about counterparty screening and about what a mixed coin does to you later.
Coins that have been through a mixer are harder to spend and harder to prove clean. That is true whether or not you knew, and it is true whether or not the mixer was prosecuted. Exchanges screen deposits against clustering heuristics, and a Whirlpool or Ricochet history is exactly what those heuristics look for. The consequence lands on the holder at the moment of an attempted deposit, often years later, and the burden of explanation is yours.
Privacy at the wallet layer and privacy at the transaction layer carry different risk. Not publishing your holdings, using fresh receiving addresses, and separating identities are ordinary operational hygiene with no counterparty attached. Routing value through a coordinating service adds an operator, and that operator can be indicted, seized, or turned into a data source. The Samourai prosecution produced records; the users are in them.
If a service takes a fee to sit in the path of your transaction, treat it as a counterparty and screen it like one. The relevant question is not whether it holds your coins. It is whether its existence becomes a fact about your coins.
None of this makes a transaction private, and none of it removes the risk that a service you used lawfully is later characterized differently. It reduces the chance that you are surprised by it.
Sources
- IRS Criminal Investigation, “Founders of Samourai Wallet cryptocurrency mixing service plead guilty”, 30 July 2025. https://www.irs.gov/compliance/criminal-investigation/founders-of-samourai-wallet-cryptocurrency-mixing-service-plead-guilty
- IRS Criminal Investigation, “Founders of Samourai Wallet cryptocurrency mixing service sentenced to five and four years in prison”. https://www.irs.gov/compliance/criminal-investigation/founders-of-samourai-wallet-cryptocurrency-mixing-service-sentenced-to-five-and-four-years-in-prison
- CourtListener docket, United States v. Rodriguez, 1:24-cr-00082. https://www.courtlistener.com/docket/68467223/united-states-v-rodriguez/
Related on this desk
- Tornado Cash: the sanctions arc from Blender.io to United States v. Storm — the civil and sanctions track of the same non-custodial question.
- The passphrase that defeated a federal seizure — the custodial mixer for contrast, where the operator held actual keys.
- What laundering crypto actually costs you, according to five sentences — where these five years sit against the rest of the sentencing record.
Disclosure. Max Avery is affiliated with Digital Ascension Group (DAG). Investment advisory services are offered through DAG Wealth, an SEC-registered investment adviser (CRD No. 328627). Registration does not imply a certain level of skill or training. DAG is not a law firm and does not provide legal or tax advice. Custody arrangements with third-party independent qualified custodians reduce certain risks but do not eliminate them. Nothing here is investment, legal, or tax advice, or a recommendation to buy or sell any asset. This article describes matters of public record; charges are allegations and defendants are presumed innocent unless and until proven guilty.