The Samourai Wallet app was used to hide the movement of Bitcoin transactions.
The founders of Bitcoin mixer Samourai Wallet will plead guilty on Wednesday, Federal court documents show, in a case that has rattled privacy advocacy groups.
Both William Lonergan Hill and Keonne Rodriguez will change their pleas in a New York court, according to the filing in U.S. District Court for the Southern District Court of New York.
Feds arrested Hill and Rodriguez last year and then shut down their Bitcoin mixing platform. The U.S. Department of Justice alleged that the app was an “unlicensed money transmitting business” used by criminals.
The indictment filed last year alleged that “while offering Samourai as a ‘privacy’ service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion.” Hill and Rodriguez had pleaded not guilty.
Bitcoin and other coin mixers are services that obfuscate crypto transactions by combining them, making payments harder to trace.
They have been popular in the past with cybercriminals who steal digital assets via exchange hacks and use such tools to hide the movement of funds typically easy to trace by following a blockchain.
Nonprofits in the crypto space previously told Decrypt that the case was unfair because both Hill and Rodriguez only created the software, which other people used to transfer user funds, and never dealt with the money themselves.
The case comes as the criminal trial for privacy protocol Tornado Cash co-founder Roman Storm comes to an end. A judge is expected to wrap up thate case Wednesday.
U.S. authorities banned Americans from using the Ethereum-based Tornado Cash in 2022, saying that criminals had used that platform to launder dirty money.
Feds then alleged that the app’s co-founders, Roman Storm and his colleague Roman Semenov, laundered more than $1 billion in criminal proceeds.
The legal team for Hill and Rodriguez could not immediately be reached for comment.
