Larry Dean Harmon, Ohio man who operated Helix, a Darknet-based cryptocurrency laundering service, pleaded guilty to a money-laundering conspiracy.
Harmon confessed to operating Helix from 2014 to 2017, according to the US Department of Justice. Helix was a bitcoin “mixer” or “tumbler,” allowing users to transmit bitcoin to selected recipients in a way that concealed the source or owner of the bitcoin in exchange for a charge. Helix was linked to and related with “Grams,” Harmon’s Darknet search engine. To keep transactions hidden from law enforcement, Harmon promoted Helix to consumers on the Darknet.
Bitcoin mixers are used to anonymize Bitcoin transactions. Since all transactions are recorded and immutable on the blockchain, this has previously helped people hide their tracks on the Bitcoin ledger. As a result, crooks began to choose mixers. Assistant Director Calvin A. Shivers of the FBI’s Criminal Investigative Division stated,
Criminals may think they can mask financial transactions by using services like Helix to conceal the source of illicit funds, The FBI and our state, local, federal and international law enforcement partners are working together every day in a complex and ever-changing digital environment to protect the American people from sophisticated money launderers and financiers
Helix collaborated with several Darknet markets, including AlphaBay, Evolution, Cloud 9, and others, to provide bitcoin money-laundering services to market clients, as per Harmon. Helix transferred approximately 350,000 bitcoin on behalf of clients, worth over $300 million at the time of the transactions, with the majority of the volume originating from Darknet marketplaces.
Harmon also committed to the forfeiture of more than 4,400 bitcoin, worth more than $200 million at today’s values, and other confiscated items related to the money laundering scheme as part of his plea deal. Harmon will be sentenced at a later date and faces a maximum sentence of 20 years in jail, a fine of $500,000, or double the value of the property involved in the transaction, three years of supervised release, and obligatory restitution.
Harmon had argued in prior court appearances that Bitcoin is not money, and so he could not be held guilty. Although he mixed Bitcoin through his business, he said that Bitcoin is not money, thus he couldn’t be prosecuted for money laundering. However, presiding Judge Beryl A. Howell dismissed that argument.
FinCEN detained Harmon in February 2020 for running his Bitcoin mixer without registering them as money service firms, a target for officials for a long time. For the charges, he received a $60 million fine.
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