The first Bitcoin mixer penalized by FinCEN fined $ 60 million


Larry Dean Harmon, owner and operator of the Helix and Coin Ninja coin blending services was struck with a $ 60,000,000 civil fine from the Financial Crimes Enforcement Network (FinCEN) for violating the Bank Secrecy Act (BSA), which is key US anti-money laundering legislation and that was only used to file a lawsuit against the co-founders of BitMEX.

FinCEN, which can investigate and impose civil penalties on monetary services firms and their past and former employees for violations of the Bank Secrecy Act, said Harmon operated Helix from 2014 to 2017 and Coin Ninja from 2017 to 2020. In assessing the penalty issued by FinCEN, Harmon is accused of willful failure to properly register Helix and Coin Ninja and willful failure to implement an effective anti-money laundering program within both businesses.

Perhaps more seriously, Harmon failed to report suspicious activity, including users who had used Helix to obscure purchases of child exploitation material and drugs. FinCEN claims to have observed 241,594 direct BTC transactions between Helix and 39 illegal darknet markets, not counting indirect transactions.

The $ 60,000,000 is a big chunk of the legal maximum, $ 209,144,554. The BSA authorizes FinCEN to impose a penalty of $ 57,317 for each intentional violation of the AML program requirements of the statute, $ 8,457 for each violation of registration requirements, and a minimum of $ 57,317 for each failure to report suspicious transactions. Coming up to $ 60,000,000 speaks to the extent of Harmon’s reluctance to operate in a compliant manner and the callousness with which he allowed his websites to be used to facilitate child exploitation, drug trafficking and money laundering. Harmon, Helix, and Coin Ninja took direct advantage of these transactions by eliminating an administrative fee from any attempt to conceal heinous criminal activity using its services.

For Harmon, FinCEN is simply the latest US government agency to look into its activities, having been indicted in Washington DC in 2019. In that indictment, Harmon is accused of running Helix as a money laundering business that it has advertised on the darknet as a way to hide transactions from law enforcement and partner directly with the AlphaBay drug market to offer Helix blending services to AlphaBay customers.

As with the founders of BitMEX earlier this month, law enforcement is now looking beyond the corporate veil and prosecuting and fining people who are committing, facilitating or otherwise aiding the commission of crimes within the resource sector. digital. While the latest wave of indictments and penalties has covered all types of digital asset players, this latest fine marks the first time FinCEN has penalized a BTC mixer. Looking at the scale of illegal transactions Harmon was able to facilitate using its mixers, it wouldn’t be a surprise if similar charges, lawsuits and fines followed. FinCEN’s wording when imposing the sanction says the same, emphasizing that it considers itself obligated to investigate and fine monetary services firms that intentionally violate the BSA and current and former employees who voluntarily participate in such violations. ”

Despite the massive fine imposed and the prosecutions pending directly on Harmon, these law enforcement actions likely represent only a small fraction of the overall crime perpetrated by Helix and other coin mixers. Reading FinCEN’s sentence assessment is a sobering experience, highlighting the scale of criminal activity facilitated by mixers like Helix. Dr. Craig Wright said in 2019 that coin mixers work illegally and that responsibility for this will extend far beyond the business entity itself.

There are far more organizations and people behind them who are engaging in the exact kind of behavior that Harmon is accused of. BCH even has its own mixer in CashShuffle, which works on much the same basis as Harmon’s Helix in that it lures criminals to use it to launder their tainted money.

Here’s Roger Ver showing how to use CashShuffle, and judging by the sheer amount of business that Harmon’s similar service has attracted, it can be assumed that FinCEN and other law enforcement agencies are very eager to look into the types of businesses being facilitated. via BCH and CashShuffle. Helpfully for those agencies, the video is titled “Tutorial: How to Use CashShuffle to Have Anonymous Bitcoin Cash Transactions by Roger Ver”:

Here is the run by Roger Ver and affiliated with BCH promoting the same tutorial on money laundering:

There’s no need to try too hard to imagine these videos and tweets appearing in a FinCEN penalty assessment or criminal charge.

Mining pools, exchanges and now mixers have all been subject to criminal investigations, lawsuits, and financial penalties in recent months. Now it’s just a matter of waiting to see which dominoes are next to fall into the criminal underworld of the digital asset ecosystem.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the flow of groups – from BitMEX to Binance,, Blockstream and Ethereum – that have co-opted the digital asset revolution and turned the industry into a minefield for the gullible (and even experts) market players.

New to Bitcoin? Check out CoinGeek Bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin, as originally intended by Satoshi Nakamoto, and blockchain.

[ad_2]Source link