US Department of Justice Sues Helix Crypto Mixer’s Founder for $60M

Paigambar Mohan Raj
Source: The Coin Republic

The US Department of Justice (DOJ) has filed a lawsuit against Larry Harmon, the founder of Helox, a crypto mixer. The suit is an attempt to recover a $60 million civil penalty imposed on Harmon in 2020. The penalty was imposed by U.S. financial regulators for allegedly failing to maintain an efficient anti-money laundering process. The lawsuit was filed in Washington DC, on October 19th.

In October 2020, Harmon was ordered to pay a $60 million civil money penalty by the Financial Crimes Enforcement Network, a division of the U.S. Treasury Department, for suspected violations of the federal Bank Secrecy Act (BSA). Moreover, the bureau, known as FinCEN, said that Harmon was running an illegal money-transmitting operation in connection with Helix. Helix, like Tornado Cash, is a crypto mixer.

FinCEN claimed that Harmon failed to collect and verify client names, addresses, and other identifiers. Additionally, over 1.2 million bitcoin transactions from June 2014 to December 2017, valued at over $300 million at the time. Harmon consented to a $311,000 reparation order in the criminal prosecution.

Harmon entered a guilty plea to a money laundering conspiracy charge in the District of Columbia’s US District Court last year. However, he has not received a sentence yet.

According to Harmon’s lawyer, Charles Flood of Houston’s Flood & Flood,

“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.”

Government agencies targeting Crypto Mixers?

Crypto mixers are beloved by hackers and scammers. illicit players put in their tainted tokens and cash out clean ones. Tornado Cash was the latest to fall under the governments’ spotlight when the platform was allegedly used by North Korean hackers. In August, a Tornado Cash Developer was arrested in the Netherlands. The popular mixer has since been sanctioned by the US. Nonetheless, crypto mixers are also used by regular people who want anonymity in their transactions.

Regardless, the events do point to mixers being an understandable target of the government. As a financial watchdog, it only seemed evident that the agency would step in if a particular platform is aiding criminals. However, it is important that the agencies understand the whole picture. The use of crypto mixers goes beyond just the criminal, which is something the agencies do not seem to understand; or at least that’s what it seems like.