Between 2014 and 2017, Harmon allegedly laundered at least 354,468 BTC. Currently, the alleged laundered funds would be worth USD 3.7 billion.
It was recently reported that Larry Dean Harmon, CEO of crypto wallet provider DropBit, was accused of allegedly laundering USD 311 million in Bitcoin through transactions on the Darknet.
Last December, Federal authorities charged 36-year-old Harmon with conspiring to commit money laundering, operating an unlicensed money transmission business, and transmitting unlicensed money, as reported by cleveland.com last February 12th, citing an indictment document.
The CEO of DropBit, who was arrested last February 6th, is accused of having sold illicit drugs through the Darknet market AlphaBay, which was closed by authorities in 2017. It should be noted that the market was a major supplier of fentanyl and heroin.
Between 2014 and 2017, Harmon laundered at least 354,468 BTC (equivalent to more than USD 311 million at the time) through a mixing service called Helix, of which he was the owner. Those bitcoins have a present value of more than USD 3.7 billion at the time of writing this article. Federal prosecutors are seeking millions of US dollars in financial penalties and want Harmon to lose all his property.
For his part, Jake Chervinsky, a general counsel at the startup Compound, a decentralized finance (DeFi) lending protocol, described the case as “difficult” on his Twitter account, saying that the Department of Justice is “going too far by charging for unlicensed money-transmission offenses.”
At the same time, Crypto podcast host Peter McCormack tweeted last February 12th that Harmon was denied bail as he is considered a flight risk although all his possessions have been confiscated, citing a discussion with the brother of DropBit CEO Gary Harmon.
However, DropBit is expected to continue to provide its service, since Gary Harmon and the developers of the application are using its funds, according to McCormack.
In the indictment documents, there is evidence of the advertising activity of Helix as a tool for mixing bitcoins, which are then exchanged for new cryptocurrencies that are not marked by its use on the Darknet. Advertising messages helped authorities to build the case against Harmon. It should be added that Helix has reportedly been promoting mixing services on the Darknet market AlphaBay since 2016.
A cryptocurrency mixer is defined as a platform that provides a system to make transactions difficult to track. These services allow Bitcoin users to hide the origin of their transactions and are used to provide them with more privacy and a certain level of anonymity.
Even though their origin has not been accurately determined, cryptocurrency mixers were widely used on sites such as Silk Road, an online black market that was operated from the deep web and accessed through the Tor browser.
To conclude, it is worth mentioning that this has not been the only case of illegal operations conducted with Bitcoin on the Darknet. Cryptocurrency firms have reported a growing number of scams against people of all ages, especially those with limited knowledge of technology resources and cryptocurrency spaces.
By Alexander Salazar