U.S. man charged with operating darknet-based bitcoin 'mixer' that laundered $300 million

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The U.S. Department of Justice (DoJ) has indicted a man from Ohio for running Helix, a darknet-based cryptocurrency laundering service that is alleged to have laundered bitcoins worth $300 million.

What has happened?

According to a press release by the Office of Public Affairs of the DoJ, 36-year-old Larry Harmon, of Akron, Ohio, has been charged with money laundering conspiracy, operating an unlicensed money transmitting business and conducting money transmission without a D.C. license.

What does this mean?

The indictment alleges that from 2014 to 2017 Harmon operated Helix, a bitcoin 'mixer' or 'tumbler' which allowed customers, for a fee, to send bitcoin to recipients in a way that concealed the source or owner of the bitcoin.

The DoJ added that Helix was also linked to Grams, a darknet search engine run by Harmon.

"Harmon advertised Helix to customers on the darknet as a way to conceal transactions from law enforcement," said the DoJ.

The indictment alleges that Helix moved over 350,000 bitcoins worth more than $300 million on behalf of customers mainly from darknet markets. Helix worked with darknet market AlphaBay to offer bitcoin laundering services for its customers. AlphaBay was one of the largest darknet marketplaces in operation when it was seized by law enforcement in 2017.

Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division said that Helix "allegedly laundered hundreds of millions of dollars of illicit narcotics proceeds and other criminal profits for Darknet users around the globe."

He added:

"This indictment underscores that seeking to obscure virtual currency transactions in this way is a crime, and that the Department can and will ensure that such crime doesn’t pay."

Internationally, the Belize Ministry of the Attorney General and the Belize National Police Department simultaneously executed a search warrant of a residence allegedly leased by Harmon in Belize as U.S. authorities executed warrants in the U.S.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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