A United States resident has been sentenced to three years in prison for running a Bitcoin mixing service that oversaw the laundering of over $300 million.
Larry Harmon, an Ohio resident ran a darknet service known as Helix. His operation makes it difficult to trace the origin of Bitcoin transactions hence a perfect tool for money launderers looking to clean money.
The US Department of Justice also noted that Larry’s platform allows funds to move undetected, which is handy for bad actors in the industry.
The Helix operation was active from 2014 to 2017. It benefitted from Larry’s partnership with major dark web platforms like Alpha Bay to process illegal transactions including drug sales, stolen data, and counterfeit goods.
The full scale of Helix Operation
- Larry pleaded guilty to running Helix as an unlicensed money-transmitting business and conspiring to launder funds. Helix mixed over 350,000 Bitcoin during its run facilitating illegal activity on a global scale according to US authorities.
- U.S. District Judge Beryl Howell ordered Larry to forfeit $311 million, the value of the Bitcoin laundered through Helix.
- Larry has been previously, fined $60 million by the U.S. Treasury for violating anti-money laundering regulations.
- Helix is a good example of a darknet mixer that works to undermine the transparent nature of cryptocurrency transactions.
- Crypto mixers obscure the origins of crypto transactions by breaking the link between sender and recipient, complicating law enforcement efforts to trace illicit activities.
Also entangled in the case is Larry Harmon’s brother Gary. After Larry’s arrest authorities discovered his brother, Gary Harmon, used stolen credentials to recover Bitcoin stored in an IRS evidence locker, per Bloomberg.
Gary was arrested and sentenced to four years in prison for accessing and spending part of the seized cryptocurrency on luxury items
Reduced sentence for Larry
- Larry was able to nail only three years of sentencing due to his level of cooperation with law enforcement agencies. Harmon’s cooperation in other prosecutions led to several arrests and the unravelling of a crime network.
- His cooperation led to the conviction of Roman Sterlingov, operator of the Bitcoin Fog mixing service, which led to a reduced sentence.
- Prosecutors highlighted Harmon’s extensive assistance and expressed confidence that his case would deter similar operations.
What to Know
- Crypto mixers are notorious in the crypto industry as an efficient tool for bad actors. The most popular crypto mixer Tornado Cash has come under fire for its use in top hacks by bad actors for money laundering and obscuring transaction origins.
- The Wazir X hacker who made away with $230 million also used Tornado cash to mix the transactions making tracing them difficult.