A U.S. judge sentenced the co-founder of Samourai Wallet to five years in prison for operating an unlicensed money transfer business that prosecutors say laundered millions in criminal funds.
Key Takeaways
- Keonne Rodriguez, co-developer of Samourai Wallet, was sentenced to the maximum five-year term by a New York federal court.
- The case marks a major regulatory move against privacy-enhancing crypto tools used in laundering schemes.
- Prosecutors said $237 million in illegal funds were routed through Samourai’s mixing services.
- This ruling follows broader government crackdowns on crypto mixers like Tornado Cash.
What Happened?
Samourai Wallet co-founder Keonne Rodriguez has been sentenced to five years in prison for conspiracy to operate an unlicensed money transmitting business. The case, overseen by Judge Denise Cote of the Southern District of New York, sets a significant legal precedent in the U.S. crackdown on crypto privacy tools used for illicit activity.
Samourai developer Keonne Rodriguez’s sentence includes 60 months in prison, three years of supervision, and a $250k fine.
— Frank Corva (@frankcorva) November 6, 2025
Here’s an overview of what else was said in the courtroom today. pic.twitter.com/ij80h61L8L
Criminal Charges and Sentencing Details
The court found that Rodriguez and his fellow developer William Lonergan Hill knowingly operated a Bitcoin mixing service used by criminals. The service, which featured tools like Whirlpool and Ricochet, made Bitcoin transactions harder to trace.
- Prosecutors accused them of facilitating over $2 billion in unlawful transactions.
- The DOJ stated over $100 million in criminal proceeds came from dark web markets, fraud, and other illicit activity.
- Rodriguez pleaded guilty in July 2025 in exchange for dropping a more serious money laundering charge, which carried up to 20 years.
Judge Cote emphasized deterrence in her ruling, stating that Rodriguez showed no real remorse. His pre-sentencing letter, which described his motivation as protecting financial privacy, was criticized for failing to acknowledge the criminal use of his software.
Judge Cote said:
Rodriguez’s lawyer had argued for leniency, citing his idealistic motivations and financial hardship. Despite his forfeiture of $6.3 million, the court also imposed a $250,000 fine and ordered that part of his future earnings go toward repayment.
Impact on Crypto Markets and Industry Reaction
The case sent immediate shockwaves through the crypto world. When the DOJ first announced charges in April 2024, Bitcoin fell by 3.6% in an hour, triggering over $33 million in liquidations.
Other privacy-focused services reacted quickly:
- Wasabi Wallet and Phoenix Wallet blocked U.S. users.
- Sparrow Wallet removed its Whirlpool integration.
Privacy advocates and crypto developers voiced concerns over the implications. Influencers and organizations like Coin Center and the DeFi Education Fund argued that creating open-source software should not be criminalized.
Regulatory Shift and Future of Privacy Tools
The ruling intensifies an ongoing shift in U.S. crypto policy. Regulators are increasingly targeting non-custodial privacy tools and developers. The fallout from this case resembles that of Tornado Cash, another privacy tool sanctioned in 2022.
With Rodriguez sentenced and Hill’s hearing scheduled next, this case could redefine legal boundaries around crypto anonymity. It also highlights the chilling effect on open-source development:
- Developers now face potential prosecution for tools used illicitly.
- Projects may restrict access or avoid the U.S. market altogether.
CoinLaw’s Takeaway
In my experience, this sentencing is a clear message from regulators: building tools that enable privacy does not grant immunity if those tools facilitate crime. While I value the need for financial privacy, this case shows that intent, marketing, and user base matter. What stood out to me most was how quickly privacy wallets reacted. It signals fear, but also an evolving playbook for compliance. Developers need to tread carefully, especially in jurisdictions like the U.S.
