The Financial Crimes Network (FinCEN) has estimated a $ 60 million civil fine from Larry Dean Harmon, founder of Bitcoin mixers Helix and Coin Ninja. The punishment is the first of its kind in the United States.
FinCEN claims that Harmon “intentionally violated the BSA registration, programming and reporting requirements by failing to register as an MSB, failing to implement and maintaining an effective anti-money laundering program, and failing to report suspicious activity.”
Between 2014 and 2017, services laundered up to 1,225,000 transactions worth $ 311 million.
Bitcoin mixers obscure or completely obscure the source and purpose of various transactions. For example, you can send a cryptocurrency to a mixer and inform the mixer of your destination address. The mixer will send bitcoin to the destination on your behalf, ensuring that the actual transaction is anonymous. FinCEN claims that Harmon “advertises its services in the darkest spaces of the Internet as a way for customers to pay anonymously for things like drugs, guns and child pornography.”
“In particular, the investigation showed that Mr Harmon deliberately disregarded his BSA obligations and applied practices that allowed Helix to circumvent BSA requirements. This includes failure to collect and verify customer names, addresses and other identifiers of more than 1.2 million transactions. Harmon, working through Helix, actively deletes even the minimal customer information it has collected. The investigation revealed that Mr. Harmon was involved in deals with drug traffickers, counterfeiters and fraudsters, as well as other criminals, “FinCEN wrote in its assessment of the sentences.
Most notably, according to FinCEN, Harmon is mixing funds for a site called AlphaBay, a darknet market that closes in July 2017 following an international investigation. Former Attorney General Jeff Sessions announced the demolition of AlphaBay and another market, Hansa, on July 20, 2017.