In a unique decision that could set a series of precedents for the future, FinCEN, the U.S. agency responsible for combating financial crimes, has mutated the creator of services that act as a Bitcoin 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 rules and legislation in the country, FinCEN accused Harmon of having acted as an operator of Helix from 2014 to 2017 and in Coin Ninja from 2017 to 2020, which operated as an exchange without the proper authorization of the regulatory agency.
FinCEN accused Harmon of purposely failing to register Helix and Coin Ninja in the correct manner, and failing to implement a program to prevent money laundering efficiently in both managed services.
In addition, the platform owner did not perform 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 brokerage house, 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 more than 1.2 million transactions.
Not only that, but while operating Helix, he reported the little information he had collected from his clients. The investigation stated that Harmon carried out transactions with exchange dealers, fraudsters and other criminals.
Recently BitMex was investigated and its creators were arrested.
The millionaire fine is certainly surprising and this, together with the recent accusation against BitMex, opens new ways and precedents for the authorities started to give more attention to different types of services that, according to the law, facilitate several crimes.
More and more the authorities are closing the siege on the supposed characteristic of the cryptomarket to be used for money laundering.