On Wednesday, the U.S. Department of Justice announced charges against Keonne Rodriguez and William Lonergan Hill, founders of Samourai Wallet, for their alleged involvement in a large-scale money laundering operation that handled approximately $2bn in unlawful transactions since 2015.

The European Parliament has made a decisive move to tighten regulations on cryptocurrency operations within the EU. The newly adopted legislative package focuses on enhancing due diligence measures for crypto firms, particularly aiming to bolster identity checks and surveillance on suspicious activities. 

A recently introduced bill in the U.S. Senate, the Payment Stablecoin Act, could significantly alter the landscape of the stablecoin market by encouraging banks to issue U.S. dollar-pegged stablecoins, according to a research note by S&P Global Ratings dated April 23.

Top stories in the Crypto Roundup today:

• U.S. DOJ Charges Samourai Wallet Founders with Money Laundering
• European Parliament Adopts New Regulations to Enhance Its Fight against Money Laundering
• New Senate Bill Could Reshape the U.S. Stablecoin Market, S&P Global Reports

U.S. DOJ Charges Samourai Wallet Founders with Money Laundering

On Wednesday, the U.S. Department of Justice announced charges against Keonne Rodriguez and William Lonergan Hill, founders of Samourai Wallet, for their alleged involvement in a large-scale money laundering operation. The charges underscore the ongoing efforts by U.S. authorities to clamp down on crypto-mixing services that might be exploited by criminals and foreign entities to obscure financial transactions.

According to the DOJ's press release, Rodriguez, 35, and Hill, 65, are accused of orchestrating a complex scheme through their crypto mixer, Samourai Wallet. This service reportedly facilitated over $100 million in transactions derived from illegal activities on the dark web. The indictment reveals a broader scope of alleged illegal activities, suggesting that Samourai Wallet handled approximately $2 billion in unlawful transactions since its inception in 2015.

The duo reportedly earned about $4.5 million in fees from these transactions, with varying rates depending on the mixing service features used. Both Rodriguez and Hill face charges of conspiracy to commit money laundering and operating an unlicensed money-transmitting business, with potential maximum sentences of 20 years and five years in prison, respectively.

The arrests occurred on the same day; Rodriguez was taken into custody in Pennsylvania, with plans for an immediate arraignment, while Hill was arrested in Portugal and is pending extradition to the U.S. In a parallel action, authorities seized the Samourai Wallet website hosted in Iceland and issued a seizure warrant for the mobile application on the Google Play Store.

The press release revealed that Samourai Wallet's founders actively promoted the platform as a money laundering tool for the black/grey markets, citing various communications and marketing materials that targeted dark market participants and online gamblers.

European Parliament Adopts New Regulations to Enhance Its Fight against Money Laundering

The European Parliament made a decisive move to tighten regulations on cryptocurrency operations within the EU. The newly adopted legislative package focuses on enhancing due diligence measures for crypto firms, particularly aiming to bolster identity checks and surveillance on suspicious activities. 

The regulations target crypto asset service providers (CASPs), including centralized cryptocurrency exchanges and gambling services, imposing new requirements to ensure more rigorous customer identity verification and mandatory reporting of dubious activities to authorities. 

Patrick Hansen, Circle's EU Strategy and Policy Director, commented on social media platform X regarding the parliamentary vote, noting that the outcome was anticipated and will be formally ratified by the Council of the EU. The rules are set to be implemented three years after this formal adoption, giving CASPs ample time to adapt to the new regulatory landscape.

Clarifying earlier misunderstandings, Hansen last month refuted rumors that the legislation would prohibit anonymous crypto wallets and self-custodial payments. He explained that the upcoming regulations would specifically affect those CASPs already governed by the Markets in Crypto-Assets Regulation (MiCA), a framework that became effective in June 2023 and will be fully applicable by the year's end.

Under MiCA, crypto exchanges and custodial wallet providers are required to perform standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, like Customer Due Diligence (CDD)—a continuation of practices already mandated under the existing AML Directive (AMLD5).

New Senate Bill Could Reshape the U.S. Stablecoin Market, S&P Global Reports

A recently introduced bill in the U.S. Senate, the Payment Stablecoin Act, could significantly alter the landscape of the stablecoin market by encouraging banks to issue U.S. dollar-pegged stablecoins, according to a research note by S&P Global Ratings dated April 23. The bill, which was introduced on April 17, aims to provide a regulatory framework that could boost bank-issued stablecoins and challenge the dominance of major non-U.S. stablecoin issuers like Tether.

S&P Global describes stablecoins as potentially becoming a "key pillar of financial markets." This assertion is supported by the launch of BlackRock’s BUIDL fund, which demonstrates the efficiencies and enhanced security stablecoins bring to the tokenization of assets and digital bonds. The proposed legislation includes significant measures such as introducing a $10 billion issuance cap for non-bank stablecoin firms and banning unbacked algorithmic stablecoins. Additionally, it would require all stablecoin issuers to maintain one-to-one cash or cash-equivalent reserves.

The implications of such regulations could be vast. For instance, the $10 billion limit on issuance for non-bank entities could pose a significant challenge for Tether, which currently has a market cap of $110 billion and is the largest issuer of U.S. dollar-pegged stablecoins. Under the new bill, Tether, a non-U.S. entity, would not qualify as a permitted payment stablecoin, potentially diminishing its use in the U.S. and shifting demand towards domestically issued stablecoins.

While the bill has garnered support for potentially reinforcing the U.S. dollar’s dominance and promoting responsible financial innovation, not all feedback has been positive. Crypto advocacy group Coin Center has criticized the bill, particularly taking issue with the ban on algorithmic stablecoins, which it argues could be unconstitutional under the First Amendment

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