The Financial Crimes Enforcement Network (FinCEN) of the US Treasury has imposed a hefty $60M fine against the operator and founder of some of the pioneer crypto mixing services – Coin Ninja and Helix’s Larry Dean Harmon. Notably, this is the first instance ever that FinCEN fined a crypto mixing service.
Harmon, the man behind the two crypto mixing firm stated above, is notably already facing several criminal charges correlating to money laundering. He has been accused of shielding AlphaBay darknet players by obscuring the source of more than $300M worth of Bitcoin between 2014 and 2017. Now, he faces the wrath of FinCEN and the $60M civil money fine.
FinCEN clarified that crypto mixers must enlist with FinCEN and vow to adhere to the money laundering compliance programs. Furthermore, mixers must also store transaction records and promptly report them. These guidelines and requirements pointed to the FinCEN clarification back in 2019.
According to FinCEN, Harmon did not do all these. Helix, which Harmon facilitated for three years starting in 2014, is not a registered money service company. Investigations pointed out that Harmon purposefully disregarded the obligations imposed by the Bank Secrecy Act (BSA) and has implemented operation frameworks that deliberately bypass BSA’s requirements. As per FinCEN, Harmon’s Helix failed to collect and authenticate customer addresses, names, and other relevant information for more than 1.2 million transactions.