Larry Dean Harmon is a hired bitcoin mixer that is now in trouble for bitcoin mixing. In other words, he’s stuck facing a multi-million dollar fine because he did his job, though whether that job is legal is still widely open to question. As the owner of bitcoin mixers Helix and Coin Ninja, Harmon has been saddled with a $60 million penalty by the Financial Crimes Enforcement Network (FinCEN).
Harmon Has Been Saddled With a Big Penalty
In a statement, FinCEN claims:
[Harmon] willfully violated the BSA’s registration, program and reporting requirements by failing to register as an MSB, failing to implement and maintain an effective anti-money laundering program, and failing to report suspicious activities… [Harmon] advertised his services in the darkest spaces of the internet as a way for customers to anonymously pay for things like drugs and guns.
Bitcoin mixing has been something of a controversial subject over the past few years, especially in the United States which still largely sees bitcoin and cryptocurrency as magnets for criminal activity. The process of mixing bitcoin or cryptocurrencies involves taking digital assets obtained through separate means and “mixing” them together in transactions as a means of throwing off third parties and making it harder to identify where the money came from or who it’s for.
It is a process that arguably gives users more privacy, but it also has a downside in that it can be utilized by bad actors to launder money and to potentially hide dirty or illicitly garnered funds. It can also be utilized to ensure funds go to criminal or outlandish sources such as terrorist organizations. Despite all bitcoin has done in the past, it’s issues like these that will ultimately prevent it from achieving mainstream status.
Over a three-year period (from 2014 through 2017), the companies named above – Helix and Coin Ninja – may have allegedly laundered more than $300 million through more than one million separate transactions.
Not Doing Enough to Prevent Crime
FinCEN continued its statement to say:
Specifically, the investigation demonstrated that Mr. Harmon deliberately disregarded his obligations under the BSA and implemented practices that allowed Helix to circumvent the BSA’s requirements. This included a failure to collect and verify customer names, addresses and other identifiers on over 1.2 million transactions. Harmon, operating through Helix, actively deleted even the minimal customer information he did collect. The investigation revealed that Mr. Harmon engaged in transactions with narcotics traffickers, counterfeiters and fraudsters, as well as with other criminals.
In addition to the set penalty, Harmon is also facing charges that he helped mix funds for a company called Alpha Bay, which has been closed since 2017. The enterprise was a darknet marketplace that was the subject of a widespread and ongoing international investigation. Former attorney general Jeff Sessions led the shutdown of the company in July three years ago.
