|

US intensifies battle against crypto privacy protocols following crackdown on Samourai Wallet

  • The founders of Samourai Wallet were arrested and charged with $100 million in money laundering.
  • Allegations against Samourai's wallet sound a huge warning to other privacy protocols.
  • Privacy tokens could suffer a huge crash due to increased legal actions by the US government.

CEO Keonne Rodriguez and CTO William Lonergan of Samourai Wallet were arrested by the US Department of Justice (DoJ) on Wednesday and charged with $100 million in money laundering on a count and illegal money transmitting on another count. This move could see privacy-focused cryptocurrencies take a dip.

Also read: Binance founder Changpeng Zhao could face three-year jail time

Samourai wallet founders arrested

The DoJ accused Samourai Wallet of executing $2 billion worth of transactions unlawfully, and with prosecution fast approaching, the founders of the wallet look to face 25 years in prison.

Both men were arrested in the early hours of the day. Lonergan was apprehended in Portugal and is expected to be in US custody soon. This action is part of the US government's recent measures against encrypted transactions.

Read more: Kucoin's BTC, ETH, and USDT reserves dip after charges from US DoJ and CFTC

"As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering," said US Attorney Damian Williams.

There are currently 10,868 BTC worth about $700 million in Samourai wallets as of the time of writing.

The allegations against Samourai Wallet sound a huge warning to other privacy protocols. The likes of Monero, Blockbend, and Railgun may need to be on the lookout for the government, as the threat of getting locked up is growing stronger.

It's interesting to note that Samourai's predicament occurred on the same day the European Parliament voted to adopt new laws enhancing "due diligence measures and checks on customers' identity."

Also read: Binance and Huobi among exchanges warned in India for AML and CFT framework oversight

The action of the DOJ against Samourai founders has stirred reactions from the crypto community, and many shared their displeasure with the government and accused them of plotting to control the cryptocurrency landscape.

Ryan Sean Adams of Bankless podcast expressed his disappointment about the arrest on X:

This follows recent actions by Ethereum co-founder Vitalik Buterin, endorsing the need for privacy in online interactions.

He also recently transferred 100 ETH ($325,000 at the time) to the Railgun privacy protocol.

With the US targeting increased legal actions at crypto privacy protocols, privacy-based tokens could dip in the coming weeks.

As a result, it won't be surprising if many investors start taking precautionary measures by selling privacy tokens.

Author

Michael Ebiekutan

With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi

More from Michael Ebiekutan
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

Crypto Today: Bitcoin, Ethereum, XRP slide further as risk-off sentiment deepens

Bitcoin faces extended pressure as institutional investors reduce their risk exposure. Ethereum’s upside capped at $3,000, weighed down by ETF outflows and bearish signals. XRP slides toward November’s support at $1.82 despite mild ETF inflows.

Ripple eyes record high breakout in 2026 as Ripple scales infrastructure

XRP has traded under pressure, but short-term support keeps hopes of a sustainable recovery in 2026 alive. The launch of XRP ETFs and regulatory clarity in the US pave the way for institutional adoption.

Bitcoin risks deeper correction as ETF outflows mount, derivative traders stay on the sidelines

Bitcoin (BTC) remains under pressure, trading below $87,000 on Wednesday, nearing a key support level. A decisive daily close below this zone could open the door to a deeper correction.

Monero builds momentum amid bullish bets and looming resistance

Monero (XMR) trades close to $430 at press time on Wednesday, after a 5% jump on the previous day. The privacy coin regains retail interest, evidenced by heightened Open Interest and long positions.

Orange Juice Newsletter – Smart insights by real people. Every day.

A free newsletter highlighting key market trends to help traders stay a step ahead. Daily insights on the most relevant trading topics, compiled by our experts in an easy-to-read format so you never miss an important move.

Bitcoin: Fed delivers, yet fails to impress BTC traders

Bitcoin (BTC) continues de trade within the recent consolidation phase, hovering around $92,000 at the time of writing on Friday, as investors digest the Federal Reserve’s (Fed) cautious December rate cut and its implications for risk assets.