Ohio Resident Charged With Laundering $311M in Bitcoin for AlphaBay

Theb

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I'm pretty sure that the authorities are not targeting Harmon because of his mixing service but rather his company is either operating without a license in the USA or it has been proven that his mixing service is an accessory of a proven dark web marketplace that offers illegal activity. There is nothing pointing out that he got arrested because of his mixing service but rather his connection to AlphaBay and committing money laundering through his Mixer.

Proving my point is his official indictment file against him

Quote from: https://www.courtlistener.com/recap/gov.uscourts.ohnd.262793/gov.uscourts.ohnd.262793.1.1.pdf

3. Starting in or about July 2014. HARMON owned and operated a money
transmitting and money laundering business called Helix. Helix was a service linked to and
affiliated with Grams, HARMON's Darknet search engine, and the two services were sometimes
referred to collectively as Grams-Helix. Helix offered an Internet-based service that was
accessible in the District of Columbia and other States.

6. From at least in or about November 2016, Helix partnered with the Darknet market
AlphaBay to provide bitcoin money laundering services for AlphaBay customers.

My guess is the feds are already giving him a deal for them to catch the "bigger fish" and that is the one who is operating AlphaBay and to shut it down for good just like what they did to Ross Ulbricht and his SilkRoad.

jseverson

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Quote from: gentlemand on April 04, 2020, 04:07:26 AM

I'm not sure the law can be bothered to delineate the difference. It's the intent of the service provider rather than the needs of the users that they'll go after.

I don't deny that authorities can probably spin facts if they're motivated enough (even if mixers aren't inherently illegal), but at least in Bestmixer's case:

Quote from: https://www.mcafee.com/blogs/other-blogs/mcafee-labs/crypto-currency-laundering-service-bestmixer-io-taken-down-by-law-enforcement/

A mixing service will cut up a sum of Bitcoins into hundreds of smaller transactions and mixes different transactions from other sources for obfuscation and will pump out the input amount, minus a fee, to a certain output address. Mixing Bitcoins that are obtained legally is not a crime but, other than the mathematical exercise, there no real benefit to it.

The legality changes when a mixing service advertises itself as a success method to avoid various anti-money laundering policies via anonymity. This is actively offering a money laundering service.

It looks like this case also advertised itself as a way to launder money, which made it blatantly illegal on top of everything else. I don't think other mixers should be too concerned just because a random one got taken down.

squatter

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STOP SNITCHIN'

Quote from: gentlemand on April 04, 2020, 04:07:26 AM

Quote from: squatter on April 03, 2020, 04:25:08 PM

I wouldn't call that a money laundering operation, but rather an unlicensed money transmitter. The latter is fairly common and carries much smaller penalties and less stigma.

Hmm. Not sure. A mixer only has one job - disguise the source of your funds.

That's not money laundering, which is intentionally disguising the source of illegally obtained funds. Moving around money without doing AML checks is a far cry from money laundering.

Quote from: gentlemand on April 04, 2020, 04:07:26 AM

Now of course for most people it's for privacy, not disguising the proceeds of crime. I'm not sure the law can be bothered to delineate the difference. It's the intent of the service provider rather than the needs of the users that they'll go after.

That's the point -- they need to prove intent. That was easy with Helix because the operator apparently openly advertised it as a money laundering service and directly partnered with AlphaBay for that purpose. That showed intent.

gentlemand

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Welt Am Draht

Quote from: squatter on April 03, 2020, 04:25:08 PM

I wouldn't call that a money laundering operation, but rather an unlicensed money transmitter. The latter is fairly common and carries much smaller penalties and less stigma.

Hmm. Not sure. A mixer only has one job - disguise the source of your funds. That's the only reason it exists and that's the only reason people use them. Now of course for most people it's for privacy, not disguising the proceeds of crime. I'm not sure the law can be bothered to delineate the difference. It's the intent of the service provider rather than the needs of the users that they'll go after.

squatter

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STOP SNITCHIN'

Quote from: gentlemand on April 03, 2020, 02:37:00 PM

If anyone decides to get legal that won't wash. They are handling the money of others and moving it elsewhere with a polish of untraceability. Because of that they should be vetting the source of the money and vetting the people who sent and received it. It's just about the perfect definition of a money laundering operation. I think centralised options are on borrowed time unless they bury themselves deeply.

I wouldn't call that a money laundering operation, but rather an unlicensed money transmitter. The latter is fairly common and carries much smaller penalties and less stigma.

Platforms that only use cryptocurrencies (no banks) are in an interesting position. The US government's attempt to take down BTC-e in 2017 highlights the fact that properly secured cryptocurrency can't be seized. Even if the authorities seize clearnet domains and servers, companies with zero exposure to custodial fiat liabilities can just spin up new domains and servers and secure new wallets. While exchanges would suffer branding issues from such a seizure, a mixer would probably be celebrated.

With a properly run mixer, the most that US or EU authorities can do is seize the domain. That's rather embarrassing for them. The public optics around playing cat-and-mouse games with mixers and clearnet domains aren't worth it. That's why we'll see low hanging fruit like Helix -- operated from the US -- taken down, but not others.

gentlemand

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Quote from: jseverson on April 03, 2020, 09:27:34 AM

The bolded part is what made his operation illegal. Mixers otherwise don't need to be warned of anything. I'm not sure why some people seem to have a vendetta against mixers when they exist to help them preserve their anonymity. At the end of the day, mixers are just tools and are only as good as their users.

If anyone decides to get legal that won't wash. They are handling the money of others and moving it elsewhere with a polish of untraceability. Because of that they should be vetting the source of the money and vetting the people who sent and received it. It's just about the perfect definition of a money laundering operation. I think centralised options are on borrowed time unless they bury themselves deeply.

jseverson

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Quote from: Kounter on April 02, 2020, 10:43:43 PM

Let this be a warning to all mixers

Sorry for taking part of a necro, but I just felt like I had to address this.

Quote from: https://www.cincinnati.com/story/news/2020/02/13/bitcoin-larry-dean-harmon-indicted-cryptocurrency-money-laundering-scheme/4746978002/

The defunct site made it as easy for internet shoppers around the world to find and buy illegal guns and drugs on the deep web as it is for the rest of us to find books and sweatshirts on the regular web.

Grams’ online companion service was called Helix. Federal prosecutors said in court records that Helix was a bitcoin money-laundering service that, for a fee, let customers send anonymous bitcoins.

“Harmon advertised Helix to customers on the Darknet as a way to conceal transactions from law enforcement,” prosecutors said in court records.

The bolded part is what made his operation illegal. Mixers otherwise don't need to be warned of anything. I'm not sure why some people seem to have a vendetta against mixers when they exist to help them preserve their anonymity. At the end of the day, mixers are just tools and are only as good as their users.

Kounter

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Let this be a warning to all mixers

hugeblack

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Larry Dean Harmon was accused of laundering more than 354,468 bitcoin (otal value at the times of transaction is over $311 million & worth $3.7 billion at today's prices.) for AlphaBay Dark-net marketplace.

He was arrested for conspiracy to commit money laundering, operating an unlicensed money transfer company and transporting funds without a license.

As prosecutors claim that he ran a mixing service called "Helix", that service played a major role in clearing AlphaBay's illegal encrypted transactions.

Read more and source ---> https://www.coindesk.com/ohio-resident-charged-with-laundering-311m-in-bitcoin-for-alphabay

Topic: Ohio Resident Charged With Laundering $311M in Bitcoin for AlphaBay (Read 219 times)