The founders of Zamora Wallet Mix were arrested in a licensing case against AML

The co-founders of cryptocurrency exchange Samurai Wallet have been arrested on money laundering charges brought by the United States Department of Justice (DOJ) and other agencies.

Zamora Wallet CEO Keon Rodriguez and Chief Technology Officer William Hill each face one count of money laundering, which carries a maximum penalty of 20 years in prison, and one count of conspiracy to conduct an unauthorized money transmission business. Five years imprisonment.

Rodriguez was arrested in Pennsylvania on the morning of April 24, and Hill was arrested the same day in Portugal. The United States is seeking Hill's extradition, according to a statement from the US Attorney's Office for the Southern District of New York. The company's servers and domains were also seized in Iceland, and a court order was issued to stop downloads of the company's app from the Google Play Store. The app has been downloaded over 100,000 times.

The Internal Revenue Service and the Federal Bureau of Investigation were also involved in the investigation. According to the DOJ statement, Zamora Wallet:

“He has conducted more than $2 billion in illegal transactions and more than $100 million in money transfers from illegal dark web markets such as Silk Road and Hydra Market; web server intrusion; phishing schemes; and plans to defraud many decentralized financial protocols.”

Zamora Wallet introduced Whirlpool's crypto mixing service and Ricochet's service, which created more unnecessary transactions for more muddy users' cryptocurrency paths. They reportedly received $4.5 million in fees.

Related: Arbitrum DAO votes on $1M funding for Tornado Cash devs' legal defense

The US government is becoming more aggressive against crypto mixers. The Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned Blender.io in May 2022 after the AXE Infinity hack. OFAC added addresses associated with Tornado Cash Blender to a list of specially designated nationals in October 2022, barring US residents from improperly using the service. This decision survived a court case. The three founders of Tornado Cash were all in custody in August 2023.

In the year In October 2023, the Treasury's Financial Crimes Enforcement Network proposed to classify crypto mixers as “major money laundering” after Hamas attacks on Israel.

Magazine: Tornado Cash 2.0: The Race to Build Safe and Legal Coin Mixers