“We would rather sit in a prison cell than meet the requirements for customer identification and anti-money laundering for Bitcoin,” Keonne Rodriguez tweeted in 2016. Together with William Lonergan Hill, Rodriguez operated the cryptocurrency mixer Samourai Wallet for about a decade. Billions in profits from crime were laundered through it. Now Rodriguez actually has to move into a cell.
The U.S. District Court for the Southern District of New York sentenced him on Thursday to five years in prison for conspiracy to operate an unlicensed money transmitting business. This is the maximum sentence. In addition, there are three years of supervised release and a $250,000 fine. $6.3 million in illicit gains have already been seized from t…
“We would rather sit in a prison cell than meet the requirements for customer identification and anti-money laundering for Bitcoin,” Keonne Rodriguez tweeted in 2016. Together with William Lonergan Hill, Rodriguez operated the cryptocurrency mixer Samourai Wallet for about a decade. Billions in profits from crime were laundered through it. Now Rodriguez actually has to move into a cell.
The U.S. District Court for the Southern District of New York sentenced him on Thursday to five years in prison for conspiracy to operate an unlicensed money transmitting business. This is the maximum sentence. In addition, there are three years of supervised release and a $250,000 fine. $6.3 million in illicit gains have already been seized from the man. His accomplice still has to wait for the announcement of his sentence.
The two Americans were able to avoid an even higher sentence through their plea: they were originally also charged with conspiracy to launder money, which carries up to 20 years in prison. This part of the indictment was dropped after their plea.
“Moral blinders”
Rodriguez’s lawyers argued for only one year and one day in prison; they portrayed their client as a young idealist committed to data protection in financial transactions. However, the prosecution was able to show that the defendants not only knew their service was used for money laundering, but that they explicitly advertised it and even invited Russian oligarchs to circumvent international sanctions. They not only waived customer identification and anti-money laundering measures but also highlighted this in their advertising.
Before the sentencing, Rodriguez addressed the judge in a letter, which is common in U.S. criminal proceedings. In it, defendants typically express remorse, explain their background and the circumstances of their crimes, and promise to do better, hoping for leniency. But this time, it backfired: the judge emphasized that the letter did not indicate that the perpetrator had realized the gravity of his crime. Instead, he likely still suffers from “moral blinders.” “There is no acknowledgment in the letter of the criminal world for which digital currency is a gift.”
The case is called USA v Keonne Rodriguez et William Lonergan Hill and is pending in the U.S. District Court for the Southern District of New York under case number 1:24-cr-00082. At the same court, the criminal proceedings against another American and a Russian are pending, who are accused of operating the competing money laundering service Tornado Cash are accused.
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This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.