William Lonergan Hill, the 67-year-old co-founder and Chief Technology Officer (CTO) of Samourai Wallet—a privacy-focused Bitcoin wallet app—was sentenced to four years in federal prison on November 19, 2025, in the U.S. District Court for the Southern District of New York.
The sentencing stems from charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business. Hill, along with co-founder and CEO Keonne Rodriguez, pleaded guilty in July 2025 after their arrests in April 2024.
Rodriguez received a five-year sentence two weeks earlier. Samourai Wallet, launched around 2015, included tools like Whirlpool a coin-mixing service and Ricochet a transaction-obfuscation feature designed to enhance Bitcoin privacy by breaking transaction links.
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Prosecutors argued these features were marketed to cybercriminals, facilitating the laundering of over $237 million in illicit funds from sources including drug trafficking, darknet marketplaces, hacks, frauds, sanctioned entities, murder-for-hire schemes, and even a child pornography site.
The service processed more than $2 billion in Bitcoin transactions from 2017 to 2024, earning the founders approximately $6.3 million in fees. 4 years reduced from the statutory maximum of 5 years due to mitigating factors.
Supervised Release: 3 years following incarceration. Fine: $250,000. Hill and Rodriguez have already paid $6,367,139.69, covering the fees earned by Samourai, in partial satisfaction of a $237.8 million forfeiture order tied to traceable criminal proceeds.
U.S. District Judge Denise Cote cited Hill’s recent autism diagnosis and advanced age as reasons for the lighter sentence compared to Rodriguez. Hill’s attorney argued that his neurodivergence contributed to his belief that the operations were legal.
Hill, a U.S. national, was arrested in Portugal and extradited. The case highlights escalating U.S. regulatory scrutiny on cryptocurrency mixing services, which obscure transaction trails to promote privacy but can enable illicit activity. The Department of Justice emphasized that such tools make it “virtually impossible” for victims to recover stolen funds.
Crypto advocates, including Bitcoin developer Alexander Städelmann, have criticized the rulings as an overreach that stifles innovation in privacy tools, potentially setting precedents for decentralized software development. Earlier defense filings claimed prosecutors withheld exculpatory evidence from FinCEN indicating Samourai didn’t require a money transmitter license, though this did not alter the outcome.
This sentencing concludes the core proceedings against the Samourai founders, though appeals or broader industry impacts remain possible. Prosecutors successfully argued that even non-custodial privacy tools like Samourai Wallet’s Whirlpool mixer qualify as unlicensed money transmitting businesses under federal law 31 U.S.C. § 5330.
If they facilitate obscured transactions exceeding certain thresholds. This ruling reinforces the Department of Justice’s (DOJ) stance that developers bear liability for foreseeable criminal misuse, regardless of open-source nature or lack of asset custody.
It aligns with FinCEN’s 2019 guidance but extends it aggressively, potentially classifying similar tools as money transmitters without explicit registration. This case parallels the August 2025 conviction of Tornado Cash developer Roman Storm, who faces up to five years for similar charges, signaling a broader DOJ crackdown on mixers tied to over $3 billion in laundered funds in 2025 alone.
Expect more indictments against privacy protocol developers, with emphasis on marketing to “high-risk” users (e.g., dark web promotions). Calls for clearer statutes on non-custodial tools, potentially via amendments to the Bank Secrecy Act, to balance innovation and anti-money laundering (AML) goals.
The rulings underscore a U.S. policy prioritizing traceability over anonymity, viewing mixers as “gifts to criminals” that hinder victim restitution. Privacy advocates, including the Bitcoin Policy Institute, decry this as a “war on privacy,” arguing it criminalizes tools essential for dissidents, journalists, and everyday users in surveillance-heavy regimes.
Coders may self-censor, relocating to jurisdictions like Portugal or Singapore with laxer rules, stifling U.S.-based innovation in zero-knowledge proofs or CoinJoin protocols. Rise in “regulatory-friendly” privacy layers (e.g., audited zk-SNARKs in Ethereum), but at the cost of usability and true anonymity.
Critics warn this erodes Bitcoin’s core ethos of pseudonymous transactions, potentially driving adoption toward centralized exchanges with KYC mandates. Rodriguez’s public petition for a presidential pardon highlights community mobilization, echoing support for Storm from the Ethereum Foundation.
Legitimate privacy seekers face reduced options, increasing reliance on VPNs or offshore tools, while criminals adapt faster via decentralized alternatives like Monero mixers. Short-term dips in privacy coins like Zcash, Dash expected, with long-term growth in compliance-focused DeFi; overall crypto adoption may slow in the U.S. due to perceived risks.
Non-U.S. regulators like EU’s MiCA may harmonize tougher rules, but it could accelerate “crypto exile” to pro-innovation hubs, fragmenting the ecosystem. Ultimately, these sentences tip the scales toward regulation, forcing the industry to innovate within legal bounds or risk existential threats to privacy as a foundational principle.
Appeals could soften this trajectory, but absent clemency, they mark the end of an era for unchecked anonymity tools.