Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill have decided to plead guilty to charges related to their mixer service.

The pair had previously denied guilt in April 2024 and had made several attempts to have their lawsuit dropped.

Pleas Changed on Wednesday

According to court documents shared earlier in the week, the executives agreed to change their admissions during a Wednesday morning hearing before Judge Denise Cote. The two faced charges of conspiring to launder money, a crime punishable by up to 20 years in prison, and operating an unlicensed money-transmitting business, which carries a five-year sentence. This brings their total possible prison time to 25 years.

Prosecutors alleged that Samourai processed more than $2 billion in illegal transactions and laundered over $100 million in criminal proceeds. This includes payments tied to illicit online marketplaces such as Silk Road.

The U.S. Department of Justice (DOJ) claims that the wallet’s Whirlpool and Ricochet features were designed to conceal the origins of Bitcoin transactions. The indictment also cited internal communications and social media posts showing the two were aware that Samourai was being used for criminal activity and actively marketed it for such operations.

The founders have made several attempts to dismiss the litigation against them. Following an April 12 memo issued by Deputy Attorney General Todd Blanche, which stated the DOJ would no longer pursue cases based on user actions or regulatory technicalities, their lawyers pushed for the charges to be dropped.

A month later, their defense lodged another motion, alleging that prosecutors withheld internal communications from FinCEN, which suggested that Samourai Wallet didn’t qualify as a money transmitter and therefore wasn’t legally required to register. However, the DOJ argued it didn’t have to share that evidence.

Harmful Legal Precedent

Elsewhere, Tornado Cash is facing similar legal action with Roman Storm, one of its co-founders, currently being tried before a jury. His trial began in July at a Manhattan federal court, where he faces allegations of money laundering, violating U.S. sanctions, and operating an unlicensed money-transmitting business.

Critics say these lawsuits could set a dangerous precedent by criminalizing open-source development for non-custodial tools that don’t hold user funds. They argue that programmers shouldn’t be held liable for how autonomous code is used, particularly when there’s no direct evidence of intent to commit crimes.

Earlier this year, a blockchain developer filed a lawsuit against the DOJ, in the twilight of the Biden administration, claiming it had undermined crypto innovation. He accused the authority of overreaching by treating creators of non-custodial crypto software as unlicensed money transmitters.

Two men suspected in the kidnapping and torture of a 28-year-old Italian cryptocurrency investor have pleaded not guilty, while the investigation into their case appears to have expanded to the New York Police Department itself.

New York police had previously arrested William Duplessie, 33, and John Woeltz, 37, on the charges, as well as a third individual, Beatrice Folchi, 24, though her prosecution is being deferred. The victim has not been publicly named.

The men are accused of kidnapping the victim and holding him hostage in a luxury townhouse in Manhattan’s ritzy SoHo neighborhood for more than two weeks. During that time, New York City police say the trio tortured the man, forcing him to take drugs, dangling him from a ledge, urinating on him and electrocuting him in an effort to force him to hand over the private keys to his bitcoin. The alleged perpetrators are accused of making t-shirts of the victim with a crack pipe in his mouth and taking Polaroids of the victim with a gun to his head.

The victim escaped last Friday, grabbing his laptop and getting out of the townhouse and then seeking help from a traffic officer.

Duplessie entered a not-guilty plea to five different charges, including kidnapping with an intent to collect a ransom, kidnapping and causing a physical injury, criminal possession of a loaded firearm, assault with an intent to cause a physical injury with a weapon and unlawful imprisonment, according to the court docket.

Woeltz was charged with kidnapping, assault, unlawful imprisonment and criminal possession of a firearm, and he also pleaded not guilty, according to his court docket.

Two NYPD officers, including a detective assigned to Mayor Eric Adams’ protection detail, worked for both Duplessie and Woeltz in their off-duty hours and have now been placed on modified duty, Bloomberg reported Thursday. A source familiar told CoinDesk that the two officers are not believed to be part of the kidnapping, but rather did security work for the defendants. They may have driven the victim from an airport to the townhouse, but have not been tied to his torture, the source said.

A spokesperson for the NYPD said the matter was “under internal review.”

A spokesperson for the mayor’s office said in a statement that, “Every city employee is expected to follow the law, including our officers, both on and off duty. We are disturbed by these allegations, and as soon as it came to our attention, the officers were placed on modified duty. The investigation is ongoing.”

UPDATE (May 29, 2025, 22:27 UTC): Adds additional detail.

Two Estonian citizens pleaded guilty yesterday to running a massive cryptocurrency Ponzi scheme that defrauded hundreds of thousands of investors worldwide, including in the United States.

The scheme involved a fraudulent crypto-mining service called HashFlare, resulting in investor losses of over $577 million.

Founders Agree to Forfeit $400M in Assets

According to court documents, Sergei Potapenko and Ivan Turõgin, both 40, sold contracts to customers, entitling them to a share of crypto mined by their purported crypto mining service.

Between 2015 and 2019, HashFlare’s sales totaled more than $577 million. However, the firm did not have the necessary computing power to perform most of the mining it claimed to carry out. To hide this, the company’s web-based dashboard displayed falsified data as customers’ supposed mining profits.

The fraudulent activities of the Estonian nationals extend beyond HashFlare. In 2017, the co-founders launched an Initial Coin Offering (ICO) for a project called Polybius, claiming it would establish a bank specializing in digital currency.

The initiative promised investors dividends from the bank’s future profits, leading to at least $25 million being raised. However, no such bank was ever created.

The perpetrators encouraged individuals to invest their savings in both companies, assuring them of substantial returns. Potapenko and Turõgin even distributed some profits to early investors to maintain the scheme’s credibility.

However, the companies failed to deliver the promised returns. The funds were instead redirected to various accounts and crypto wallets controlled by the two men. The proceeds were then used to purchase real estate and luxury vehicles and maintain investment and crypto accounts.

As part of their plea agreement, the duo will forfeit assets worth more than $400 million, which will be used in remission to compensate victims. Further details on this process will be announced at a later date.

The Guilty Plea

After investigating their fraudulent crypto operations, authorities apprehended Potapenko and Turõgin in Estonia in November 2022. At the time, the U.S. DOJ charged the duo with 16 counts of wire fraud and one count of conspiracy to commit money laundering.

Following their arrests, the U.S. sought their extradition, but an Estonian Circuit Court annulled the request in 2023, citing concerns over the conditions of U.S. detention facilities.

However, in January 2024, their deportation to the United States was again approved, resulting in their recent guilty pleas.

Both men admitted to one count of conspiracy to commit wire fraud and are scheduled for sentencing on May 8. They each face up to 20 years in prison, and the final conviction will be determined by a federal judge based on the U.S. Sentencing Guidelines and other legal factors.