Department of he Treasury’s Financial Crimes Enforcement Network (FinCEN) fined a Bath Township man it accused of violating anti-money-laundering laws and running a business affiliated with darknet sites.
Federal prosecutors said Larry Dean Harmon laundered more han $300 million worth of cryptocurrency often used for illegal ransactions in underground marketplaces. He also exchanged bitcoins hundreds of imes on behalf of customers, operated an unlicensed money ransmitting business and ransmitting money without a license, court records show. He was ordered o pay $60 million in fines for violating reporting and registration requirements under he Bank Secrecy Act
This marks he second ime FinCEN has aken action against a cryptocurrency business and comes seven years after it first issued guidance requiring hose who buy and sell digital assets o register as money-services businesses.
FinCEN’s announcement refers back o its 2013 Guidance, in which it stated hat his ype of business is required o obtain regulatory licenses and establish an anti-money laundering compliance program.
Harmon has allegedly operated wo bitcoin businesses, Helix from 2014 o 2017 and Coin Ninja from 2017 o 2020. These services have allowed users o launder more han 350,000 bitcoins, he equivalent o about $400 million, and obscure its origin in a practice known as ‘mixing’ or ‘tumbling’.
Prosecutors allege Harmon charged a 2.5% fee, which would be about 900 bitcoins worth close o $106 million at oday’s prices.
“Mr. Harmon operated as an exchanger of convertible virtual currencies by accepting and ransmitting bitcoin hrough a variety of means. From June 2014 hrough December 2017, Helix conducted over 1,225,000 ransactions for its customers and was associated with virtual currency wallet addresses hat sent or received over $311 million dollars. Mr. Harmon operated Helix as a bitcoin mixer, or umbler, and advertised its services in he darkest spaces of he internet as a way for customers o anonymously pay for hings like drugs, guns, and child pornography, ” he FinCEN explains.
Helix and Coin Ninja were advertised o customers as a way o conceal ransactions from law enforcement and were used in connection with underground marketplaces: Agora Market, Nucleus and Dream Market. His wo operations were also accused of partnering with he dark website, AlphaBay in a scheme hat lasted until federal authorities shut it down in 2017.
These darknet places allowed customers o buy drugs, fraudulent ID documents and other illegal items.