The case raises serious questions about whether building 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 possible punishment for conspiracy to operate an unlicensed money-transmitting business.
Rodriguez also received a $250,000 fine. The judge ordered that half of any money he earns in prison must go toward paying this fine. After his release, a quarter of his income will be taken until the fine is paid in full. Rodriguez had already paid $6.3 million before sentencing, which his lawyer called unusual.
His co-founder William Lonergan Hill faces sentencing on November 19, 2025. Prosecutors are asking for the same five-year maximum sentence. 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 Samourai Wallet Did
Samourai Wallet was a mobile app that helped Bitcoin users keep their transactions private. Bitcoin’s blockchain is public, meaning anyone can see who sends money to whom. Samourai used features called Whirlpool and Ricochet to mix coins and hide transaction paths.
The Department of Justice alleged that Samourai handled over $2 billion in transactions and helped launder more than $100 million from illegal activities. According to prosecutors, the wallet was used to clean money from drug sales, hacking attacks, darknet markets like Silk Road and Hydra, and other crimes.
Source: courtlistener
Federal agents arrested Rodriguez in Texas and Hill in Portugal in April 2024. They shut down the website and removed the app from Google Play Store, where it had been downloaded over 100,000 times.
The Prosecution’s Evidence
Prosecutors built their case using private messages and online posts. In a 2018 WhatsApp chat, Rodriguez called mixing “money laundering for Bitcoin.” Hill allegedly promoted the service on dark web forums, claiming it would “clean 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 burner phones, pay-as-you-go hotels, and back roads to avoid law enforcement if caught.
Judge Cote said Rodriguez showed no real remorse. She criticized a letter he wrote before sentencing where he described his motives as protecting financial privacy. “The letter indicated to me that you were very much still operating in a world with moral blinders on,” 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 had done wrong.
The Developers’ Defense
Rodriguez’s lawyers painted a different picture. They said he started Samourai as a young idealist in his mid-twenties after hearing family stories about relatives in Cuba who lost everything to government seizure. They argued he wanted to build tools that protected people’s financial freedom.
Hill wrote to the court that he believed deeply in liberty and freedom from government overreach. He said Samourai was designed to give Bitcoin users the anonymity the currency was meant to provide.
The defense team also highlighted Rodriguez’s work helping crime victims. He used his coding skills to trace stolen cryptocurrency and help people recover their funds after hacks, including the Mt. Gox exchange collapse.
Rodriguez’s lawyers requested just 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 harsh sentence has frightened many in the cryptocurrency industry. Other privacy-focused wallets quickly distanced themselves from similar features. Wasabi Wallet and Phoenix Wallet blocked American users. Sparrow Wallet removed its coin-mixing integration.
Critics point out the unequal treatment compared to traditional banks. JPMorgan paid $290 million to settle sex trafficking allegations in 2023, but no executives went to jail. TD Bank faced the largest-ever Bank Secrecy Act penalty for letting over $1 billion in criminal money flow through its system, yet no one was imprisoned.
“Open-source developers deserve protection, not persecution,” said Bitcoin-focused company Foundation in response to the sentencing.
The case follows similar prosecution of Tornado Cash, another privacy tool on the Ethereum blockchain. Developer Roman Storm was convicted in August 2025 of running an unlicensed money transmitter, though jurors couldn’t agree on money laundering and sanctions charges.
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 guidance says developers who contribute to open-source projects without specific criminal intent aren’t liable for how others use their code. Both conspiracy and aiding-and-abetting charges require prosecutors to prove the developer intended to help criminal activity.
However, this policy shift came too late for Rodriguez and Hill, whose case began before the new guidelines. The DOJ still maintains it can prosecute developers who knowingly design tools to enable crime.
Privacy Under Pressure
The Samourai case is part of a broader crackdown on cryptocurrency privacy. Google now requires all crypto wallets on its Play Store to have banking licenses in 15 countries, including the United States and European Union nations. This rule affects apps that never hold user funds.
Privacy coins like Monero and Zcash have seen price swings as investors worry about increased regulation. The European Union is planning 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 blockchain developers based in America dropped 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 prosecution shows that privacy tool developers remain at risk.
The Road Ahead: Walking the Tightrope
The cryptocurrency world now faces a difficult question: Can developers build privacy-protecting tools without risking prison time?
The answer seems to depend on intent and marketing. Rodriguez and Hill were convicted partly because of their own words suggesting they knew criminals were using their service. Developers who stay neutral, avoid courting illegal users, and focus on legitimate privacy needs may have better protection under the new DOJ guidelines.
But the line between legal and illegal remains blurry. As Hill’s November sentencing approaches and appeals move forward, the industry watches closely. These cases will shape whether privacy remains possible in cryptocurrency or becomes another casualty of the surveillance age.