In a unique decision that could set a series of precedents for the future, FinCEN, the US agency responsible for combating financial crime, has mutated the creator of services that act as Bitcoin’s mixer. These services are used to make Bitcoin transactions more anonymous.
Larry Dean Harmon, creator and owner of two Bitcoin mixer services (Helix and Coin Ninja), was fined $60 million by FinCEN (Financial Crimes Enforcement Network) for violating the country’s anti-money laundering laws.
Through the Banck Secrecy Act (BSA), a set of the country’s rules and legislation, FinCEN accused Harmon of acting as an operator of Helix from 2014 to 2017 and in Coin Ninja from 2017 to 2020, which operated as an exchange without proper regulatory authorization.
FinCEN accused Harmon of purposely failing to register Helix and Coin Ninja in the correct manner, and failing to implement a programme to prevent money laundering efficiently in both managed services.
In addition, the platform owner did not carry out any type of activity report suspicious of transactions that might be being used in illegal activities. According to the document reporting the fine, FinCEN found more than 240,000 bitcoin transactions between Helix and 39 darknet black markets.
The document also highlights that Harmon offered its services in the „darkest places“ of the internet, in the same markets where weapons, drugs and other types of illegal materials were sold.
In addition to acting illegally as a broker, he was also accused of not applying the proper KYC practices. The document states that he did not collect any of the necessary data (names, addresses and other forms of identification) from over 1.2 million transactions.
Not only that, but while operating Helix, he reported the little information he had collected from his customers. The investigation stated that Harmon had carried out transactions with exchange dealers, fraudsters and other criminals.
Recently BitMex was investigated and its creators were arrested.
The million-dollar fine is certainly surprising and this, together with the recent indictment against BitMex, opens up new avenues and precedents for the authorities to begin to pay more attention to different types of services that, according to the law, facilitate various crimes.
Increasingly, the authorities are closing in on the supposed characteristic of the cryptomarket to be used for money laundering.