U.S. Seeks 5-Year Sentences in Crypto Privacy Case, Testing Developer Liability

U.S. prosecutors have demanded five-year prison sentences for Keonne Rodriguez and William Lonergan Hill, the co-founders of Samourai Wallet, a cryptocurrency privacy tool accused of laundering over $237 million in illicit funds between 2015 and 2024. The pair, who pleaded guilty in July to operating an unlicensed money transmitting business, face sentencing hearings on November 6 and 7, 2025, respectively, according to a Lookonchain report. The prosecution's request, filed under the maximum allowable penalty under 18 U.S.C. §371, underscores a broader government effort to crack down on crypto mixing services and privacy-focused tools, as described in a FinanceFeeds article.

The indictment alleges that Samourai Wallet, which marketed itself as a privacy-first Bitcoin wallet with coin-mixing features, facilitated transactions tied to drug trafficking, cybercrime, and fraud schemes. Prosecutors argue that the service's operations—estimated to have processed 246.3 BTC in fees (worth approximately $269 million)—constituted a "massive money laundering service" that knowingly served criminal users, according to a Coinpaper report.

Hill, who served as chief technical officer, admitted in a sentencing letter to promoting the platform to "computer hackers and other criminals," further solidifying the government's case, as noted in another Lookonchain post.

Defense attorneys, however, have criticized the prosecution's request as "unreasonably harsh." Rodriguez's team sought a sentence of one year and one day, while Hill's defense requested credit for time served, arguing both defendants cooperated with authorities and accepted responsibility, according to The Block. The Probation Office recommended 42 months for each defendant, but prosecutors maintained the 60-month term, citing the severity of the alleged offenses and the need to deter similar activities in the crypto space.

The case has drawn comparisons to the ongoing legal battle involving Tornado Cash, a decentralized crypto mixer whose co-founder, Roman Storm, was convicted in August on a single charge of operating an unlicensed money transmitter. Storm's acquittal on related money laundering and sanctions charges sparked criticism from privacy advocates, who argue that developers should not be held liable for how users exploit their tools. The Samourai and Tornado Cash cases together highlight the U.S. Justice Department's strategy of holding platform operators accountable for criminal activity facilitated through their services, even when users operate independently.

Legal experts warn that the outcomes of these cases could set precedents for how U.S. regulators define liability in decentralized finance (DeFi). The government's filings suggest a stance that developers retain responsibility for criminal uses of their platforms if they retain operational control or marketing influence—a position that could chill innovation in privacy-focused crypto projects. Samourai, which shut down after the founders' arrests in April 2024, had marketed its coin-mixing features as a way to "hide the trail" of transactions, a claim prosecutors now frame as evidence of intentional obfuscation.

The November sentencing hearings will test whether the court adopts the prosecution's full recommendation or aligns with the Probation Office's lower range. A ruling in favor of the government's stance could signal a tougher regulatory environment for crypto privacy tools, while a more lenient sentence might encourage developers to continue innovating in the space. As the digital asset sector grapples with balancing privacy and compliance, these cases underscore the growing tension between technological advancement and regulatory oversight.