Larry Dean Harmon stands accused of committing money laundering for his role in the Helix tumbler and mixing service offered on AlphaBay, a darknet site. For those wondering how these services run afoul of the law, the U.S. Department of Justice (DOJ) has helpfully released their side of the story, clearly laying out what Harmon allegedly did.
For those who don’t know what a coin mixer or tumbler do, these service allegedly offer to obscure the traceability of cryptocurrency. While they advertise that this increases privacy for users, it can also be interpreted as a form of money laundering, particularly when the transactions being obscured are for illicit purposes. That’s what the DOJ is highlighting in this case.
“Helix allegedly laundered hundreds of millions of dollars of illicit narcotics proceeds and other criminal profits for Darknet users around the globe,” said Assistant Attorney General Brian A. Benczkowski of the DOJ’s Criminal Division. “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.”
The bottom line is that due to the traceability of blockchains, these tumblers don’t work as well as some hope they would. “For those who seek to use Darknet-based cryptocurrency tumblers, these charges should serve as a reminder that law enforcement, through its partnerships and collaboration, will uncover illegal activity and charge those responsible for unlawful acts,” said U.S. Attorney Timothy J. Shea of the District of Columbia.
The charges against Harmon suggest he helped launder as much as $3.7 billion in crypto, if calculated at today’s prices. He offered the service through Helix, which appeared on the AlphaBay darknet site. He specifically advertised his services as a way to avoid the prying eyes of law enforcement.
“The brazenness with which Helix operated should be the most appalling aspect of this operation to every day citizens. There are bad actors and then there are criminals who facilitate hundreds of other crimes,” said Don Fort, Chief, IRS Criminal Investigation. “The sole purpose of Harmon’s operation was to conceal criminal transactions from law enforcement on the Darknet, and because of our growing expertise in this area, he could not make good on that promise.”
Time will tell if the DOJ can make their charges stick on Harmon, but the evidence looks to be on their side. What authorities have proven is that no matter how criminals try to obscure their transactions, the law will always have a way of tracking them down.
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