Bad news for lovers of financial privacy: The US authorities want to regulate the crypto market. Now the operator of the Bitcoin mixer Helix has been sentenced to a hefty fine.
In an official press release on October 19, FinCEN (short for Financial Crimes Enforcement Network) reported a fine of $ 60 million and ongoing criminal proceedings against the Bitcoin Formula mixer Helix.
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The founder, administrator and main operator of the platform, Larry Dean Harmon, is accused of money laundering and running an unlicensed money business. His projects Helix (2014-2017) and Coin Ninja (2017-2020) anonymized over 311 million US dollars through more than a million different Bitcoin transactions and thus violated the so-called Bank Secrecy Act (BSA for short), among other things.
This states that financial institutions are forced to support US authorities in detecting and preventing money laundering. This includes legally compliant customer identification checks, recording transactions and reporting suspicious activities. None of this was possible due to the lack of a license from Helix and Coin Ninja.
Order in the Wild Crypto West
Mixers are also known by names such as tumblers or blenders. These make it possible to disguise the traces of money flows and thus increase privacy. Services like Helix collect Bitcoin transfers from different addresses and mix them up. These are then divided into small amounts and sent to addresses that the payer specified beforehand.
That is not illegal per se. But if you get involved with criminals and promote or facilitate money laundering, the situation changes very quickly. Because American authorities decide that all services that do money laundering transactions are illegal. Allegations made by Larry Dean Harmon and which are still under investigation in the current criminal proceedings.
Darknet advertising creates a need for explanation
His aggressive PR strategy can be fatal for him. In the darknet, the American presented his services as an anonymous payment method for the purchase of weapons, drugs and even child pornography. It is therefore not without reason that some crypto exchanges block all addresses associated with Bitcoin mixers.
Above all, however, any authorities are listening carefully. They are more and more determined to introduce law and order into the wild crypto west. Just recently, the IRS (short for Internal Revenue Service) hired Chainalysis to crack the code of private cryptocurrencies like Monero. A contract that cost the IRS $ 625,000.
In 2020, the first penalties against illegal activities in connection with the ICO boom of 2017 also rolled in. Celebrities like Steven Seagal and rapper TI were sentenced to fines here. It also hit some companies. Due to a lack of ICO registrations, companies like Salt and BitClave have been instructed to issue refunds to their investors.