Larry Dean Harmon, founder and operator of early bitcoin mixing services Helix and Coin Ninja, is being fined $60 million by the U.S. Treasury’s Financial Crimes Enforcement Network (Fincen) for allegedly violating anti-money laundering rules.
According to documents published Oct. 19 by Fincen, the fine surrounds the transmission of “at least 356,000 bitcoin transactions through Helix between June 2014 and December 2017” on behalf of criminals using the dark web.
Prosecutors allege Harmon was running an unregistered money services business (MSB) in violation of the Banking Secrecy Act (BSA). The Ohio software developer had a duty to report suspicious activity, they say, but he systemically violated U.S. money laundering regulations.
Fincen said Harmon openly marketed Helix as a service that didn’t care about know-your-customer processes and facilitated more than $311 million worth of transactions in bitcoin (BTC). The largest volume of crypto cleaned through the Helix mixer allegedly came from dark web markets like Alphabay, Dream Market, and Agora Market.
The Fincen charges state:
Mr. Harmon willfully violated the BSA’s registration, program, and reporting requirements by failing to register as a MSB…[he] engaged in transactions with narcotics traffickers, counterfeiters and fraudsters, as well as criminals.
Bitcoin mixers, or tumblers, are used to obfuscate the origin or ownership of crypto transactions – usually for the purpose of eluding unwanted attention from law enforcement.
Harmon later founded and acted as the chief executive officer of Coin Ninja from 2017 to 2020. Coin Ninja operated in the same manner as Helix, including as an unregistered money-services business, Fincen said.
According to the enforcement action, the transactions conducted by Harmon allowed customers to pay for things like drugs and child pornography on darknet markets, as well as support counterfeiting and fraudulent activities.
The action is the first by the U.S. Treasury Department bureau against a convertible virtual currency “mixer” or “tumbler,” exchanges designed to conceal the source of the currency, the agency said.
Harmon was arrested in February for his operation of Helix. He faces charges of conspiracy to launder monetary instruments, operating an unlicensed money transmitting business, and conducting money transmission without a license in the District of Columbia. He’s currently out on bail.
What do you think about the penalty imposed on Helix and Coin Ninja? Share your thoughts in the comments section below.
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