According to Gizmodo, Samourai Wallet co-founder Keonne Rodriguez received a five-year prison sentence on Thursday for money laundering conspiracy charges. This was the maximum possible sentence for operating privacy-focused bitcoin wallet software that prosecutors claimed helped criminals launder millions of dollars. Rodriguez also got a $250,000 fine and three years of supervised release, while his co-founder William Lonergan Hill still awaits sentencing. The sentencing comes just weeks after Binance co-founder Changpeng “CZ” Zhao received a presidential pardon from Donald Trump for similar money laundering charges. Prosecutors focused on Samourai’s Ricochet and Whirlpool privacy features and the company’s social media activities promoting criminal use.
Privacy versus crime
Here’s the thing about privacy tools in crypto – they’re walking a razor-thin line between legitimate user protection and enabling criminal activity. Samourai Wallet was fundamentally non-custodial software, meaning users controlled their own keys and funds. But prosecutors argued there was enough centralization in their server operations and fee collection to make them liable. They pointed to specific features like Whirlpool (for coin mixing) and Ricochet (which added extra transactions to obscure trails) as evidence of intentional money laundering facilitation. And the social media posts didn’t help their case – apparently they were pretty open about criminal usage on platforms like X.
The legal landscape
This case feels eerily similar to the Tornado Cash situation, where developer Roman Storm got convicted under the same money transmission laws. But there’s a crucial difference – Tornado Cash was a fully decentralized Ethereum dapp, while Samourai had some centralized components. What’s really interesting is that FinCEN actually told prosecutors six months before charges that Samourai likely didn’t qualify as a money services business due to its non-custodial structure. And the DOJ itself indicated they wouldn’t prosecute developers of “truly decentralized” software. So where’s the line? Basically, if there’s any revenue model or centralized component, you’re vulnerable.
Political priorities
Now let’s talk about the elephant in the room. We’ve got a presidential pardon for CZ, who ran a massive centralized exchange that processed actual criminal funds for years. And then we’ve got a five-year sentence for a developer building privacy software. The disconnect is staggering. Trump positioned himself as the “Crypto President,” but his administration’s actions seem wildly inconsistent. They’re dropping cases against token peddlers while throwing the book at privacy developers. The GENIUS Act passed earlier this year focused almost entirely on stablecoins to protect dollar dominance, while the more comprehensive Clarity Act keeps getting delayed. Coin Center is pushing hard for developer protections in that legislation, but who knows if it’ll actually happen with government shutdowns and other delays.
What this means for developers
If you’re building in crypto right now, this sentencing should make you nervous. The message seems to be: build something centralized that makes money and has political connections, and you might get a pardon. Build privacy tools that actually protect users, and you could face maximum sentences. The Trump administration’s executive order on non-custodial developer protections is just that – an order, not law. And without solid legislation like the Clarity Act including those Coin Center-recommended protections, developers remain vulnerable. So we’re left with a system where writing code can land you in prison while operating billion-dollar exchanges that actually facilitated crime gets you a get-out-of-jail-free card. What kind of innovation ecosystem does that create?
