The Financial Crimes Enforcement Network (FinCEN) of the US Department of Treasury recently fined a man from Bath Township for money laundering. He allegedly laundered over $300 million worth of cryptocurrency via illegal transactions.
AML law violations via darknet websites
According to the prosecutors, Bath Township resident Larry Dean Harmon violated the US anti-money laundering laws and ran a business affiliated with darknet websites. He laundered over $300 million worth of digital currencies which were used for illegal transactions on the darknet marketplaces. He also exchanges Bitcoins on behalf of his customer’s hundreds of times. According to court records, he was operating an unlicensed money transmitting business and transmitting money without a proper license.
Harmon has been ordered to pay a $60 million fine for violating reporting and registration requirements under the Bank Secrecy Act. He has operated two Bitcoin-related businesses. The first was called Helix which ran from 2014 to 2017 and the second was Coin Ninja that ran from 2017 to 2020. Users laundered over 350,000 Bitcoins using these services, valued at more than $400 million. The origins of these coins were hidden using mixing services.
FinCEN takes the second action against the crypto business
This is the second time that FinCEN has taken action against a crypto-related business. The agency issued guidance for those buying and selling crypto assets seven years ago, asking them to register as money services businesses. The latest announcement also refers to its 2013 guidance, in which it suggested the type of business required to obtain regulatory licenses and establish an anti-money laundering compliance program.
According to the prosecutors, Harmon operated as an unlicensed money services business and charged a 2.5% fee from users, which would be around 900 Bitcoins valued at $106 million at current prices. They highlighted that Helix made over 1,225,000 transactions for its customers between June 2014 and December 2017. It was associated with a digital currency wallet address that received over $311 million dollars. Helix was a Bitcoin mixer that advertised on darknet marketplaces.
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