A New York judge on Wednesday sentenced Samourai Wallet co-founder William Lonergan Hill to four years in prison, the second conviction in a case crypto advocates say threatens software development freedom.
Judge Denise L. Cote sentenced the 67-year-old developer to three years of supervised release and imposed a $250,000 fine, according to a statement by the U.S. Attorney's Office for the Southern District of New York.
The sentence comes two weeks after Samourai Wallet’s co-founder, Keonne Rodriguez, was handed a five-year prison sentence and a similar fine.
Rodriguez and Hill pleaded guilty in July to conspiring to operate an unlicensed money transmitter, after prosecutors agreed to drop more serious money-laundering charges.
"The sentences the defendants received send a clear message that laundering known criminal proceeds—regardless of the technology used or whether the proceeds are in the form of fiat or cryptocurrency—will face serious consequences," U.S. Attorney Nicolas Roos said in the statement.
Authorities also said Samourai Wallet users relied on its “Whirlpool” (2019) mixing service and “Ricochet” (2017) hop-adding tool to obscure Bitcoin transactions, moving more than 80,000 BTC worth over $2 billion and generating about $6 million in fees.
Prosecutors also presented evidence that Hill promoted Samourai on the darknet forum Dread as a way to “clean dirty BTC,” while Rodriguez encouraged Twitter hackers in 2020 to use Whirlpool and described mixing in messenger WhatsApp as “money laundering for Bitcoin.”
Autism defense
Hill's defense attorney argued his client's recently diagnosed autism impaired his judgment, giving him a "magical thinking, autistic view" that non-custodial tools insulated him from legal liability, according to The Rage’s report.
While Judge Cote acknowledged the diagnosis would make prison "more difficult" for Hill, she rejected claims that minimized the crime, stating "people should be deterred" from such actions.
She then reduced his sentence from the prosecution's requested 60 months to 48 months.
Hill will start his sentence on January 2 of next year, while Rodriguez must surrender to law enforcement custody on December 19.
‘Double standard’
Privacy advocates earlier told Decrypt the case could carry sweeping implications on developers' ability to write open-source software while being free from fear of persecution.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, told Decrypt that the Samourai ruling points to a double standard in financial enforcement and that targeting privacy tools is “a two-tier justice system.”
U.S. authorities have “made it clear they do not want crypto users to enjoy privacy,” he said, calling the ruling “a chilling moment" that treats Samourai’s cash-like privacy tools as criminal.
Stadelmann noted the U.S. government is “making an example” of the Samourai founders and said the industry must push for presidential pardons while continuing to build decentralized tools to “fight back against the surveillance state.”
Rodriguez has launched a petition calling on President Donald Trump to pardon both developers.
"Developers shouldn't be liable for the actions of bad actors using their software," Rodriguez tweeted Wednesday.
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