US Treasury Hits Bitcoin Mixer With $60 Million Penalty

The US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) today announced the first-ever penalty against a Helix and Coin Ninja cryptocurrency mixing services.

FinCEN assessed a $60 million civil money penalty against Larry Dean Harmon, the founder and operator of the Helix and Coin Ninja cryptocurrency tumblers, for violating the Bank Secrecy Act (BSA) and its regulations while operating the two services as unregistered money services businesses (MSB).

Harmon was the operator of the Helix bitcoin tumbler between 2014 and 2017, and the operator and Chief Executive Officer (CEO) of Coin Ninja from 2017 to 2020.

356,000 bitcoin transactions within three years

“FinCEN’s investigation revealed that Mr. Harmon willfully violated the BSA’s registration, program, and reporting requirements by failing to register as a MSB, failing to implement and maintain an effective anti-money laundering program, and failing to report suspicious activities,” FinCEN said today.

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Harmon advertised the two bitcoin mixers’ services “in the darkest spaces of the internet” as secure and anonymous ways to “pay for things like drugs, guns, and child pornography.”

Based on FinCEN’s investigations, while operating through the Helix bitcoin tumbler, Harmon engaged in transactions with counterfeiters, fraudsters, narcotics traffickers, as well as various other criminals.  

“Beginning on or about June 6, 2014, through on or about December 16, 2017, Mr. Harmon doing business as Helix, conducted over 1,225,000 transactions for customers and is associated with virtual currency wallet addresses that have sent or received over $311 million,” according to FinCEN’s assessment.

“FinCEN has identified at least 356,000 bitcoin transactions through Helix between June 2014 and December 2017.”

The largest volume of cryptocurrency cleaned through the Helix tumbler came from dark web illegal markets including AlphaBay, Dream Mark, Agora Market, Nucleus, and several others.

Also prosecuted for money laundering

Harmon is also currently being prosecuted on charges of conspiracy to launder monetary instruments, operating an unlicensed money transmitting business, and conducting money transmission without a license as BleepingComputer reported in February.

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“Helix allegedly laundered hundreds of millions of dollars of illicit narcotics proceeds and other criminal profits for Darknet users around the globe,” Department of Justice’s Criminal Division Assistant Attorney General Brian A. Benczkowski said.

Harmon also allegedly owned and operated the Grams dark web search engine starting with April 2014 according to the three-count indictment.

He also partnered with AlphaBay in November 2016, the largest dark web marketplace, from December 2014 until July 2017 when law enforcement shut it down.

“In or about June 2014, shortly before launching Helix. HARMON posted online that Helix was designed to be a ‘bitcoin tumbler’ that ‘cleans’ bitcoins by providing customers with new bitcoins ‘which have never been to the darknet before’,” the indictment reads.

“In or about November 2016, the AlphaBay website recommended to its customers that they use a bitcoin tumbler service to ‘erase any trace of [their] coins coming from AlphaBay,’ and provided an embedded link to the Tor website for Grams-Helix.”