The case raises serious questions about whether creating privacy tools is now considered a crime.
The maximum sentence
On November 6, 2025, Keonne Rodriguez was sentenced to five years in federal prison for his role in creating Samourai Wallet, a Bitcoin privacy tool. U.S. District Judge Denise Cote handed down the harshest sentence possible for conspiracy to operate an unlicensed money transmitting business.
Rodriguez was also fined $250,000. The judge ordered that half of the money he would earn in prison be used to pay the fine. After his release, a quarter of his income will be taken from him until the fine is paid in full. Rodriguez had already paid $6.3 million before the sentencing, which his attorney called unusual.
Its co-founder, William Lonergan Hill, faces sentencing on November 19, 2025. Prosecutors are seeking the same maximum sentence of five years. Both men pleaded guilty in July 2025 to avoid more serious money laundering charges that could have put them in prison for 20 years.
What the Samurai wallet did
Samourai Wallet was a mobile application that helped Bitcoin users keep their transactions private. Bitcoin’s blockchain is public, meaning anyone can see who is sending money to whom. Samourai used features called Whirlpool and Ricochet to mix coins and hide transaction paths.
THE The Justice Department alleged that Samourai processed over $2 billion in transactions and helped launder over $100 million from illegal activities. Prosecutors say the wallet was used to clean money from drug sales, hacking attacks, darknet marketplaces like Silk Road and Hydra, and other crimes.
Source: listener
Federal agents arrested Rodriguez in Texas and Hill in Portugal in April 2024. They shut down the website and removed the app from the Google Play Store, where it had been downloaded more than 100,000 times.
Prosecution evidence
Prosecutors built their case using private messages and online posts. In a WhatsApp conversation in 2018, Rodriguez called the mix “money laundering for Bitcoin.” Hill allegedly promoted the service on Dark Web forums, claiming it would “clean up dirty Bitcoin” and make it “untraceable.”
The government also pointed to a six-page escape plan found in Rodriguez’s home. The plan detailed how he would use cell phones, pay hotels and back roads to avoid law enforcement if he was arrested.
Judge Cote said Rodriguez had shown no real remorse. She criticized a letter he wrote before sentencing, in which he described his motivations as protecting financial privacy. “The letter told me that you were still operating in a world with moral blinders,” she told him during the hearing.
Rodriguez apologized in court, saying: “I am truly sorry and I understand the seriousness of my crimes. ” But prosecutors argued he still didn’t fully accept what he did wrong.
Defending developers
Rodriguez’s lawyers painted a different picture. They said he started Samourai as a young idealist in his mid-20s, after hearing family stories about relatives in Cuba who had lost everything to government seizures. They said he wanted to create tools that protect citizens’ financial freedom.
Hill wrote to the court that he believed deeply in freedom and freedom from government interference. He said Samourai was designed to give Bitcoin users the anonymity the currency was intended to provide.
The defense team also highlighted Rodriguez’s work on behalf of victims of crime. He used his coding skills to trace stolen cryptocurrencies and help people recover their funds after hacks, including the collapse of the Mt. Gox exchange.
Rodriguez’s lawyers requested only one year and one day in prison. They pointed out that he had already cooperated with authorities and paid the full forfeiture amount before sentencing.
Impact on privacy tools and developers
The heavy sentence has scared many people in the cryptocurrency industry. Other privacy-focused wallets quickly distanced themselves from similar features. Wasabi Wallet and Phoenix Wallet blocked US users. Sparrow Wallet has removed its coin mixing integration.
Critics highlight the unequal treatment compared to traditional banks. JPMorgan paid $290 million to settle sex trafficking allegations in 2023, but no executives were jailed. TD Bank faced its biggest penalty ever under the Bank Secrecy Act for allowing more than $1 billion in criminal money to flow through its system, but no one was jailed.
“Open source developers deserve protection, not persecution,” the Foundation, a Bitcoin-focused company, said in response to the sentencing.
The case follows similar lawsuits against Tornado Cash, another privacy tool on the Ethereum blockchain. Developer Roman Storm was convicted in August 2025 of operating an unlicensed money transmitter, although jurors failed to agree on money laundering charges and penalties.
New DOJ guidelines offer some hope
In a positive development, the Department of Justice clarified its position on developer liability in August 2025. Acting Assistant Attorney General Matthew Galeotti announced that “merely writing code without ill intent is not a crime.”
The new guidelines state that developers who contribute to open source projects without specific criminal intent are not responsible for how others use their code. The conspiracy and aiding and abetting charges require prosecutors to prove the developer intended to contribute to criminal activity.
However, this policy change came too late for Rodriguez and Hill, whose case began before the new guidelines. The DOJ still maintains that it can pursue developers who knowingly design tools to enable crime.
Privacy under pressure
The Samourai affair is part of a broader crackdown on cryptocurrency privacy. Google now requires all crypto wallets in its Play Store to have banking licenses in 15 countries, including the United States and European Union countries. This rule affects apps that never hold user funds.
Privacy coins like Monero and Zcash have seen price fluctuations as investors worry about increased regulation. The European Union plans to ban privacy-focused cryptocurrencies starting in 2027.
Many developers are leaving the United States to work in countries with clearer rules. The share of US-based blockchain developers fell from 25% to 18% between 2021 and 2025 due to regulatory uncertainty.
Despite the Trump administration’s generally pro-crypto stance — including an early pardon for Silk Road founder Ross Ulbricht in January 2025 and a pardon for Binance founder CZ Zhao in October 2025 — the Samourai lawsuits show that privacy tool developers remain at risk.
The Road Ahead: Walking the Tightrope
The world of cryptocurrencies now faces a difficult question: can developers create privacy tools without risking prison?
The answer seems to depend on intent and marketing. Rodriguez and Hill were convicted in part because of their own comments suggesting they knew criminals were using their services. Developers who remain neutral, avoid courting illegal users, and focus on legitimate privacy needs may receive greater protection under the DOJ’s new guidelines.
But the line between legal and illegal remains blurred. As Hill’s November sentencing approaches and appeals move forward, the industry is watching closely. These cases will determine whether privacy remains possible in cryptocurrency or whether it becomes another casualty of the surveillance age.
