Wednesday, May 27, 2020

Larry Harmon, CEO of Bitcoin Wallet Dropbit Arrested for Money Laundering Conspiracy

Report confirms that the U.S. law officials have arrested Larry Harmon, CEO of Bitcoin wallet and service Dropbit. And charges related to money laundering have been filed against him in the federal court for allegedly running Helix, a Bitcoin mixing service that enabled darknet users to launder money anonymously. Also, prosecutors allege that Helix facilitated the transfer of at least $300 million worth of cryptocurrency, according to Cleveland’s report on February 12, 2020.

IRS and FBI Agents Arrests Larry Harmon

Per the report, Larry Harmon was arrested by IRS and FBI agents on February 6, 2020, for allegedly running a Bitcoin mixing service called Helix. Reportedly, Helix allowed users of darknet platforms such as AlphaBay, Agora Market, Nucleus and Dream Market to launder money anonymously. In line with that, laundered through Helix is at least 354,468 BTC, valued at the time at $311 million.

According to prosecutors, Harmon promoted Helix in 2014 as a way of hiding transactions from law enforcement. He had written, “there is no way LE would able to tell which addresses are helix addresses.”

Furthermore, a grand jury in Washington, D.C. indicted the 36-year-old in December 2019, before his arrest in February. The indictment holds that Harmon also operated two businesses, Coin Ninja and Harmon Web Innovations with no license to operate. Alledged, also, is that Harmon conspired to launder money instruments through these platforms.

U.S. Authorities Seek Fine Worth Millions of Dollars

Accordingly, U.S. authorities are seeking fines worth millions of dollars as a penalty for these offences. What’s more, they want Harmon to forfeit his house and properties in different locations in the country. U.S. Magistrate Judge Kathleen Burke ordered that Dropbit’s CEO remain in the authorities’ care and sent to Washington, D.C. for prosecution.

Harmon Could Spend 30 Years in Jail If Convicted

On the other hand, Peter McCormack, a well-known member of the cryptocurrency community outlined that Harmon could spend up to 30 years in prison if found guilty. At the moment, Coin Ninja assets are frozen. Hence, his brother and developers are using their own cash to keep the platform running.

“Larry has been denied bond as he is considered a flight risk even though they have confiscated all his assets. Also, all Coin Ninja assets have been frozen and @garmon2525 believes that the FBI has removed $4k of Bitcoin from their lightning node,” McCormack wrote.

For some time now, the authorities have been making efforts to uncover mixer providers. Also, stricter money-laundering rules is now in place. Cryptocurrency exchanges too must obtain user information through KYC. These steps aim at eroding the anonymity offered by cryptocurrency payments.

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