FinCEN Penalizes First Bitcoin “Mixer” For Violating AML Laws
By RTTNews Staff Writer | Published: 10/20/2020 10:25 AM ET
U.S. financial watchdog has slapped Larry Dean Harmon and his two companies with a $60 million civil money penalty for violations of the Bank Secrecy Act (BSA) and its implementing regulations. Harmon is the founder, administrator, and primary operator of Helix and Coin Ninja, convertible virtual currency “mixers,” or “tumblers.”
The Financial Crimes Enforcement Network (FinCEN) found that Harmon operated Helix as an unregistered money services business (MSB) from 2014 to 2017 and Coin Ninja from 2017 to 2020.
Harmon, doing business as Helix and Coin Ninja, operated as an exchanger of convertible virtual currencies by accepting and transmitting bitcoin through a variety of means. Helix conducted over 1.23 million transactions to sent or received over $311 million.
FinCEN’s investigation has identified at least 356,000 bitcoin transactions through Helix. Harmon operated Helix as a bitcoin mixer, or tumbler which enabled customers to anonymously pay for things like drugs, guns, and child pornography. Harmon subsequently founded Coin Ninja and operated similarly.
According to FinCEN, exchangers and administrators of convertible virtual currency are money transmitters under the BSA and are obligated to register with FinCEN, maintain anti-money laundering compliance and meet all reporting and record-keeping requirements.
FinCEN had also clarified in 2019 that financial institutions that are mixers and tumblers of convertible virtual currency must also meet these same requirements.
FinCEN’s investigation revealed that Harmon willfully violated the BSA’s registration, program, and reporting requirements by failing to register as a MSB, failing to implement and maintain an effective anti-money laundering program, and failing to report suspicious activities.
Harmon also failed to collect and verify customer names, addresses, and other identifiers on over 1.2 million transactions. He deleted even the minimal customer information he did collect.
The investigation revealed that Harmon engaged in transactions with narcotics traffickers, counterfeiters and fraudsters, as well as other criminals.
Additionally, Harmon is currently being prosecuted in the U.S. District Court for the District of Columbia on charges of conspiracy to launder monetary instruments and the operation of an unlicensed money transmitting business in connection with his operation of Helix.
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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.
Article reposted on Markethive by Jeffrey Sloe