67-year-old Samourai CTO sent to prison in controversial bitcoin privacy case

The last verdict in the privacy-focused bitcoin (BTC) wallet Samourai case has been announced, a reminder of wider implications for the whole cryptoasset industry.

US District Judge Denise L. Cote sentenced William Lonergan Hill (67), the co-founder and CTO of the wallet, to four years in prison, one year less than another co-founder, Keonne Rodriguez, who was sentenced on November 6th.

According to the US Attorney's Office for the Southern District of New York, both co-founders, who pleaded guilty this past summer to avoid harsher sentences, "participated in a conspiracy to operate a money transmitting business in which they knowingly transmitted criminal proceeds."

Both sentenced developers have also paid more than $6 million, representing the fees Samourai earned, in satisfaction of an order to forfeit $237.8 million, the larger sum representing the total traceable criminal proceeds for which Samourai executed transactions, according to the attorneys.

As reported by Cybernews, in the crypto world, this case is mostly seen as an ongoing attack on privacy tech, with calls to "free Samourai" resurfacing after Hill's sentence as well. However, both developers are being criticized even within the bitcoin community for knowingly advertising their services to criminals.

For example, the attorneys claim that in one exchange on WhatsApp, Rodriguez explained the BTC mixing process used by Samourai as "money laundering for bitcoin," and "personally encouraged the hackers of a social media platform to 'feed' and 'send' the criminal proceeds into Samourai’s Whirlpool."

However, the prosecutors are being criticized for ignoring regulators. Earlier this year, the Washington-based crypto industry lobby group Coin Center stated that prosecutors charged two developers with operating an unlicensed money transmission business, despite the developers' knowledge that the relevant regulator, FinCEN (Financial Crimes Enforcement Network), did not consider the software they built to constitute money transmission.

"[The Department of Justice, DOJ] withheld it from the defense and the public for more than a year," Coin Center said, adding that this was also the case in the prosecution of Roman Storm, one of the developers of the Tornado Cash mixer, who was also found guilty of conspiracy to run an unlicensed money transmission business.

"We are also aware of inappropriate investigations against other developers in this space. Even if these investigations are dropped, nothing currently stops the DOJ from simply restarting them and continuing its illegal war against devs," Coin Center warned.