The US Justice Department earlier this week sued Larry Harmon, founder of a cryptocurrency “mixer” to recover a $60 million civil penalty that was imposed on him in 2020 by FinCEN, a US financial regulator, for alleged failures to maintain an effective anti-money laundering programme. The lawsuit filed in Washington DC federal court against Harmon is about a cryptocurrency “mixer”, or “tumbler” called Helix. The US authorities said that the anonymizing service could send virtual currency in a way that concealed the source or owner.
The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department imposed a $60 million civil money payment on Larry Harmon for violations of the federal Bank Secrecy Act (BSA), back in October 2020. FinCEN alleged that Harmon was operating an unlicensed money-transmitting business in connection with Helix.
According to Reuters, FinCEN in 2020 said its "investigation demonstrated that Mr. Harmon deliberately disregarded his obligations under the BSA and implemented practices that allowed Helix to circumvent the BSA's requirements."
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FinCEN said Harmon failed to "collect and verify customer names, addresses, and other identifiers" on more than 1.2 million bitcoin transactions from June 2014 to December 2017 valued at the time at $300 million.
According to Reuters, Harmon pleaded guilty to a money laundering conspiracy charge in the US District Court for the District of Columbia, last year.
Harmon’s lawyer, Charles Flood in a court filing said, “In 2014 Larry Harmon began operating Grams and later HELIX. Harmon never set out to break the law and if he had known in 2014 that operating a bitcoin tumbler was illegal, he never would have done it.”
Reuters report also added that in the criminal case, Harmon agreed to a $311,000 restitution order. The authorities seized various bitcoin "wallets" from Harmon as part of the criminal investigation.
Harmon's sentencing was deferred, pending cooperation with the US that the government said last month "remains active and ongoing."
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