The US Financial Crimes Enforcement Network (FinCEN) said it has assessed a USD 60m civil money penalty against Larry Dean Harmon, the founder, administrator, and primary operator of bitcoin (BTC) mixer (a.k.a. “tumbler”) Helix and Coin Ninja, for violations of the Bank Secrecy Act (BSA) and its implementing regulations.
FinCEN claims that Harmon willfully violated the BSA’s registration, program, and reporting requirements by failing to register as a money services business (MSB), failing to implement and maintain an effective anti-money laundering program, and failing to report suspicious activities.
The authority added that by running a service that helps cryptocurrency users to increase their privacy, Harmon failed “to collect and verify customer names, addresses, and other identifiers on over 1.2 million transactions.”
“Harmon, operating through Helix, actively deleted even the minimal customer information he did collect. The investigation revealed that Mr. Harmon engaged in transactions with narcotics traffickers, counterfeiters and fraudsters, as well as other criminals,” FinCEN said.
From June 2014 through December 2017, Helix conducted over 1,225,000 transactions for its customers and was associated with virtual currency wallet addresses that sent or received over USD 311m dollars, the announcement said.
Harmon operated Helix as an unregistered MSB from 2014 to 2017 and Coin Ninja from 2017 to 2020, it added. He is currently being prosecuted in the US District Court for the District of Columbia on charges of conspiracy to launder monetary instruments and the operation of an unlicensed money transmitting business in connection with his operation of Helix.
The BSA (and OFAC) = the sword of Damocles over crypto, and will be for several more years.