[2020-10-20]FinCEN fined bitcoin mixer

gentlemand

legendary

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Welt Am Draht

Quote from: coupable on October 22, 2020, 01:42:08 AM

First thought about all the running mixers. Authorities can easly confirm that any of them is involved in money lundering. It's ridiculous to punish someone by 30 years in jail just for running a mixing service. Better to tax the service instead of shutting it down, imo.
Where to review the case? OP didn't mention any reference for the information.

Money laundering drug money was his sole intention from minute one. Creating and running a mixer was one aspect of that. This isn't a case of a common or garden mixer being pulled up and hit with charges.

coupable

hero member

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Quote from: Quickseller on October 21, 2020, 11:39:21 PM

This is good/important information. I haven't reviewed the case, but the premise is flawed IMO. I don't think it is a slam-dunk case. People should be aware of this case though

First thought about all the running mixers. Authorities can easly confirm that any of them is involved in money lundering. It's ridiculous to punish someone by 30 years in jail just for running a mixing service. Better to tax the service instead of shutting it down, imo.
Where to review the case? OP didn't mention any reference for the information.

Quickseller

copper member

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Merit: 2374

This is good/important information. I haven't reviewed the case, but the premise is flawed IMO. I don't think it is a slam-dunk case. People should be aware of this case though

gentlemand

legendary

Activity: 2590

Merit: 3015

Welt Am Draht

This particular case is different from a mixer being hit out of nowhere with these charges. If I remember rightly he created this service from the off to specifically integrate with darknet markets. It otherwise wouldn't have existed.

No doubt other mixers are effectively doing the same thing but that strain of user is seeking them out. They didn't solicit them. Those mixers could argue they have no control or interest over whose coins turn up. Not sure how far that line of reasoning would go of course.

Carlton Banks

legendary

Activity: 3430

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lol no-one's ever gonna be able to control people using anonymized BTC

the technology to do Coinswaps exists already by using Lightning channels:

1. start 2 lightning nodes
2. get incoming liquidity on 1 node
3. insert coins you wish to de-identify into the other node (i.e. open outgoing channels to random/unknown LN nodes)
4. send all the coins for de-identifying from one node to the other

you end up with completely unknown mix of coins at one lightning node, and some small amount of reserve channel balance at the other (probably less than you would pay in mixing fees to these questionable 3rd party mixers). You can donate the reserve amount(s) to charity, or spend them in some low risk way

And all 100% p2p/decentralized (and _not_ recorded on the blockchain, either)

and of course, "on-chain" Coinswap will eventually become available as well

Daltonik

legendary

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The founder of the Helix cryptocurrency mixing service and CEO of Coin Ninja Larry Dean Harmon, was fined $60 million at the request of the financial crimes enforcement network (FinCEN). According to investigators, Harmon laundered more than $300 million through the darknet markets Abraxas, Agora, Hansa, Hydra and Wall Street Market. FinCEN prosecutors also Said that the suspect was a partner of the now defunct AlphaBay marketplace through which he allegedly laundered $27 million in bitcoins

The case of Larry Dean Harmon sets a precedent in US law, as the justice Department for the first time called mixing cryptocurrency a crime, and this threatens potential problems for any such service. Harmon was arrested in February on suspicion of money laundering and operating an unlicensed money transfer service, and faces up to 30 years in prison. An interesting detail in the course of the case, the US court recognized bitcon as money.

Topic: [2020-10-20]FinCEN fined bitcoin mixer (Read 164 times)