Bitcoin Mixing CEO pleads guilty to money laundering

[ad_1]

Helix CEO Larry Dean Harmon pleaded guilty to a conspiracy to launder money market instruments today, CoinDesk reported, after the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said so. accused of helping criminals launder hundreds of millions of dollars through a process called Bitcoin Mix.

FinCEN said in October 2020 that Harmon “has completed over 1,225,000 transactions for clients and is associated with virtual currency wallet addresses that have sent or received over $ 311 million” through Helix between 2014 and 2017 But he never registered Helix or his other company, Coin Ninja. , as money service businesses.

Helix has also “promoted its services in the darkest spaces of the Internet as a way for customers to anonymously pay for things like drugs, guns and child pornography,” according to FinCEN, which has Also stated that Harmon “has engaged in transactions with narcotics traffickers, counterfeiters and fraudsters, as well as other criminals.”

All of these factors led Harmon to be the first person in the United States to be accused of offering a Bitcoin mixing service. But what exactly is the Bitcoin mix? It is essentially a cooperative effort to make Bitcoin more private by combining the funds of a group of people into a single transaction which is then distributed equally among all participants.

“Basically if a hundred users all send exactly 0.1 BTC to a new address that they control, then merge those 100 transactions into one big transaction, everyone gets 0.1 bitcoin back, but no one can see where it got it, “Bitcoin Magazine explained, adding that these mixers” can be designed in such a way that even the entity that “merges” the transaction cannot determine which coins went where “.

Not all – and maybe not even the majority – of Bitcoin owners who use mixers are looking to launder money. Some might simply seek to increase the privacy of their transactions based on their principles rather than the practical desire to evade law enforcement, financial regulators and others.

But there’s no denying that Bitcoin mixers, much like the dark web’s Antinalysis blockchain analytics service, appeal to cybercriminals. The question now is whether FinCEN and other financial regulators will target more Bitcoin mixing service providers now that the case against Harmon has set a precedent.

As for Harmon: FinCEN fined him $ 60 million in October 2020. The charge he pleaded guilty to carries a maximum sentence of 20 years in federal prison, and according to CoinDesk, his lawyer said he would also be subject to “a significant and lengthy confiscation agreement.”

[ad_2]