Privacy tech on trial: Samourai Wallet founder hit with max prison term

Three months after the developer of a popular crypto mixer was found guilty, the co-founder of the privacy-focused bitcoin (BTC) wallet, Samourai, was sentenced to five years in prison.

The sentence was announced at the US District Court for the Southern District of New York on Thursday. Judge Denise Cote decided to impose the maximum sentence of 60 months, while also requiring the co-founder, Keonne Rodriguez, to pay a $250,000 fine.

According to Inner City Press, reporting from the court, Cote imposed the maximum sentence due to individual and general deterrence. The judge also reportedly said that she was troubled by the letter from Rodriguez, as he didn't accept responsibility for his "anti-social behavior" and that "the crypto world is a gift to criminals."

"There is no recognition of the human suffering that was facilitated by the defendant," Cote was quoted as saying, referring to the fact that criminals used Samourai to launder stolen money.

As reported, this past summer, Rodriguez and another co-founder, William Lonergan Hill, pleaded guilty to conspiracy to operate an unlicensed money transmitting business, while avoiding charges related to money laundering conspiracy. It also helped the duo reduce their possible sentence. Back then, the co-founders also agreed not to appeal their sentence if it was five years or less.

Hill is scheduled to be sentenced on November 19th.

In the bitcoin and broader crypto community, the sentence was mostly seen as an ongoing attack on privacy tech, with multiple calls to "free Samourai." However, others have reminded people of the things the Samourai Wallet developers were criticized for before – for advertising their services as the most "secure methods to clean dirty BTC," to make it "untraceable, clean," and ensure the user would "never get caught."

"Mens rea – as much as I hate to see a bitcoin ecosystem developer go down, not all privacy tech is created equally, and intention absolutely matters… obviously, it’s a bad idea to advertise your software as a better way to clean dirty BTC," said bitcoiner and CEO of BTC lending platform Libre, Ben Sigman.

Meanwhile, Roman Storm, the developer of the popular crypto mixer Tornado Cash, is still awaiting his sentence, as he was found guilty of conspiracy to run an unlicensed money transmission business, which could also carry a sentence of up to five years in prison, this past August.

Back then, crypto industry players claimed that this precedent might put many developers at risk, forcing the industry to keep defending privacy-enabling tech.

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