Key Notes
- Developers face five-year sentences despite arguing they followed legal guidance and never held user funds.
- Privacy features allegedly facilitated criminal transactions including darknet markets and fraud schemes totaling over $237 million.
- Case follows Trump’s pardon of CZ and echoes Tornado Cash prosecution amid growing debate on crypto privacy tools.
US prosecutors are calling for the maximum five-year prison terms for Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill, following their guilty pleas to conspiracy charges for operating an unlicensed money transmitter.
Based on the government’s sentencing memorandum reported by The Rage on November 3, the developers designed Samourai’s privacy features—like Whirlpool and Ricochet—to help users obscure transaction trails, which prosecutors say attracted criminal activity. They allege over $237 million in illicit funds from drug trafficking, darknet markets, hacks, and fraud passed through the wallet, including new claims of ties to murder-for-hire schemes and a child pornography site.
Related article: Zcash Price Prediction: Network Activity Hits Record High – Are Privacy Coins the New Trend?
Rodriguez and Hill have asked for time served. In his letter, Hill described prioritizing Bitcoin BTC $106 640 24h volatility: 3.1% Market cap: $2.13 T Vol. 24h: $70.84 B as digital cash for personal independence, saying he studied FinCEN guidance and consulted lawyers who assured compliance since the wallet never held user funds. He expressed regret over marketing tactics. Rodriguez echoed this, noting his work helping victims trace stolen Bitcoin via tools like OXT, according to The Rage reporting.
“I believe deeply in the idea of liberty and freedom from government overreach, and rationalized my actions as promoting these ideas, […] I co-founded a software company to develop tools that could provide the anonymity necessary to make Bitcoin work as intended. I made it clear that I was stepping back from the general direction taken by the larger space at the time: Bitcoin as a short-term investment vehicle; get-rich-quick schemes; and various other financial-scam behaviors. I focused on Bitcoin as digital cash and all that encompassed with regards to personal independence,” Hill writes to judge Cote overseeing the case.
Rodriguez’ letter is not yet publicly available and will be linked as soon as the PACER database is updated.
A letter from NYU professor David Yermack framed their efforts in the cypherpunk tradition, linking to thinkers like Milton Friedman and recent SEC commissioner remarks on financial privacy risks.
Trump Pardons CZ and Tornado Cash Case
This push follows President Trump’s pardon of Binance founder Changpeng Zhao (CZ) two weeks ago, after a four-month sentence for AML lapses. Crypto reporter L0la L33tz, founder of The Rage, labeled the memo “absolute insanity” on X, noting its focus on dropped charges while AML reforms gain bipartisan support.
The Government’s sentencing memorandum on Keonne and William is absolute and pure insanity.
First of all, throughout the entire sentencing memorandum, there seems to be close to no mention of the developers conspiring to operate an unlicensed money transmitter, which is what the… https://t.co/HD0g7ogSaK pic.twitter.com/A1c8Tw3vvh
— L0la L33tz is more fun on Nostr (@L0laL33tz) November 3, 2025
The case echoes the Tornado Cash prosecution, where developer Roman Storm was convicted in August 2025 on unlicensed transmission but saw deadlocks on laundering counts, as detailed in a Coinspeaker coverage. Support for such developers grew, with the Ethereum Foundation pledging funds.
Broader privacy debates continue, as seen in discussions and similar cases happening worldwide, while Zcash ZEC $411.4 24h volatility: 4.4% Market cap: $6.72 B Vol. 24h: $975.11 M becomes the new leading privacy coin in an impressive rally that follows increased interest in privacy, according to Google search data.
According to The Rage, the outcome could signal wider crackdowns on non-custodial privacy software, bringing back old fears from developers building software and solutions similar to the Samourai Wallet, a formerly leading privacy-focused Bitcoin wallet.
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