Crypto mixing operator Darknet pleads guilty to laundering $ 300 million in BTC

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Ohio man Larry Dean Harmon has pleaded guilty to laundering more than $ 300 million while operating the Darknet-based Bitcoin mixing service Helix.

On August 19, the US Department of Justice announced that the 38-year-old had pleaded guilty to laundering more than 350,000 Bitcoin through Helix from 2014 to 2017.

Bitcoin mixers are used to help people anonymize their Bitcoin. In the past, this has helped people cover their tracks on the Bitcoin ledger, as all transactions are recorded and immutable on the blockchain. As a result, mixers have become a favorite for criminals.

Harmon admitted in court that he knew that users were mixing up the income generated from drug trafficking and various other illegal activities. It has also knowingly partnered with darknet markets to provide money laundering services to their users.

In addition to Helix, Harmon operated the darknet search engine, Grams, founded digital asset wallet provider, DropBit, and was CEO of Coin Ninja, a Bitcoin media site where Harmon advertised its Bitcoin mixer.

Harmon lost over 4,400 BTC in the plea (worth over $ 200 million at current prices). Harmon’s sentencing date has not yet been determined, with the Ohio native facing up to 20 years in prison plus fines.

Ohio Resident Pleads Guilty To Using Darknet-Based Bitcoin Mixer That Laundered Over $ 300 Million https://t.co/eWFjY7jr6c

– Department of Justice (@TheJusticeDept) August 18, 2021

In previous hearings, Harmon had tried to argue that BTC was not money, so he could not be convicted. His reasoning was that although he did indeed mix Bitcoin through his service, Bitcoin is not money, which would mean that he cannot be accused of money laundering. Presiding Judge Beryl A. Howell, however, rejected this argument.

The term money […], generally designates a medium of exchange, a method of payment or a store of value. Bitcoin is those things. Indeed, [Harmon] never disputes that Bitcoin is money as that term is usually used, and he concedes that Bitcoin is a form of currency, the judge ruled.

Officials have long targeted Helix and Harmon, the IRS Cybercrime Unit, the Belize Attorney General’s Department, the Belize National Police Department, and the FBI collaborating to investigate Harmon and Helix since at least 2014 so that the mixer was in operation. over the course of several years.

In February 2020, FinCEN shut down Harmon for using their Bitcoin mixer without registering them as money services businesses. He was fined $ 60 million for the charges.

Acting U.S. Attorney Channing D. Phillips highlighted the role darknet mixers play in helping criminal actors hide their identities, saying:

“Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing plague. They may try to hide their identities and launder millions of sales behind technologies like Helix. But the department and its law enforcement partners will highlight their activities. “

Related: Suspected $ 366 Million Bitcoin Mixer Erupted After 10 Years of Blockchain Data Analyzed

Other Bitcoin mixing services have come under fire in recent years amid a flurry of US regulatory action. Last April, the operator of the Bitcoin mixer Fog was arrested in Los Angeles for laundering around $ 336 million in BTC over 10 years.

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