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The Department of Justice (DOJ) has brought forth its first case regarding the crime of bitcoin and crypto mixing. 36-year-old Larry Harmon of Akron, Ohio, has been charged with operating a company known as Helix, a dark web marketplace designed to “clean” illicitly garnered cryptocurrencies by mixing them with others.
Harmon Has Been Operating Helix for Some Time
The process can be somewhat complicated depending on how large the initial sum is. If you have several bitcoins, or you were involved in a transaction that involves multiple cryptocurrencies, the process requires that this transaction be broken down into several small ones. They are then sent from several different crypto addresses to give third parties the idea that they stem from different sources, thereby making them appear less suspicious.
Don Fort, a chief of the Internal Revenue Service’s (IRS’s) criminal investigation department, explained in a statement:
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. Working in tandem with other sites, he sought to be the ‘go-to’ money launderer on the Darknet, but our investigators once again played the role of criminal disrupters, unraveling the interlinked web from one tentacle to another.
In addition to his business of washing digital money clean, Harmon also operated a system called Grams, which allows users to search for drugs and other illicit paraphernalia at the lowest prices. Grams also sought to hide users’ identities as they searched.
While it has nothing to do with Telegram, the encrypted messaging firm is likely to take some heat over this, considering Grams shares the same name as Telegram’s new cryptocurrency which has stirred quite a bit of controversy itself since it first emerged. Telegram is currently awaiting its first hearing against the New York Attorney General’s office this month.
All purchases and dispersals of gram tokens have been put on hold until the court hearing can be complete. The company has been accused of selling a security-based token without properly registering with the Securities and Exchange Commission (SEC).
The First Case of Its Kind?
It is estimated that Harmon may have been operating Helix since early 2014 and “cleaned” as many as 350,000 bitcoins. At the time of their processing, the coins were worth as much as $300 million, though now the coins are allegedly to be more than $3.5 billion.
While this may be the first DOJ-processed case, other bitcoin mixing companies have come about in the past. Two of the most prominent examples include Bit Mixer, which shut its doors promptly in 2017, resulting in no executives being charged with crimes. In addition, e-BTC has also been shut down, resulting in the arrest and extradition of Alexander Vinnik.