FinCEN Slaps $60 Million Fine on Bitcoin-Mixing Service Operator
U.S. Department of Treasury Bureau, the Financial Crimes Enforcement Network (FinCEN) is not a big fan of Bitcoin mixer services.
FinCEN Fines Bitcoin Mixing Service Operator $60 Million
On October 19, the FinCEN announced that it had fined Larry Dean Harmon – the operator of Helix and Coin Ninja crypto-mixing services – a mammoth $60 million for his alleged involvement in laundering tens of millions of dollars in cryptocurrencies.
The laundering was mostly done for darknet markets, including Abraxas, Agora, Hansa, Hydra, and Wall Street Market, the announcement reads.
According to the government organization, Harmon has been sued for operating bitcoin mixing services and violating the U.S. Bank Secrecy Act. For the uninitiated, Harmon was sued earlier this year in February for the U.S. Department of Justice for operating Helix.
Per official documents published on Monday, FinCEN identified “at least 356,000 bitcoin transactions through Helix between June 2014 and December 2017.”
The statement reads in part:
“Mr. Harmon, doing business as Helix and Coin Ninja, operated as an exchanger of convertible virtual currencies by accepting and transmitting bitcoin through a variety of means. From June 2014 through December 2017, Helix conducted over 1,225,000 transactions for its customers and was associated with virtual currency wallet addresses that sent or received over $311 million dollars.”
“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.”
On the other end, Harmon’s family continues to deny any links with darknet marketplace AlphaBay. FinCEN claims that Helix was used to launder $27 million in bitcoin for AlphaBay by using its BTC mixing services.
Bitcoin “Mixing” Doesn’t Sit Well with Regulators
From a regulatory standpoint, FinCEN’s penalty holds a particular significance as it is the first time that the U.S. Department of Justice has officially called bitcoin mixing a “crime.”
It’s worthy of note that in February 2019, FinCEN had ordered the operator of a P2P Bitcoin exchange to pay a fine of $35,000 for wilfully violating the Bank Secrecy Act.