Ohio Man Charged for Laundering $311M in Bitcoin Tied to AlphaBay

Larry Dean Harmon is facing accusations of laundering over 354,468 bitcoin, which was worth more than $311 million at the time of the transactions but skyrocketed to around $3.7 billion now. He got arrested for conspiracy to launder money, running an unlicensed money transfer biz, and handling funds without the necessary license. Prosecutors say he was behind a mixing service called "Helix", which was a key player in processing AlphaBay's illegal encrypted trades.

Let this be a warning to all mixers

Sorry for taking part of a necro, but I just felt like I had to address this. The bolded part is what made his operation illegal. Mixers otherwise don't need to be warned of anything. I'm not sure why some people seem to have a vendetta against mixers when they exist to help them preserve their anonymity. At the end of the day, mixers are just tools and are only as good as their users.

If anyone decides to get legal that won't wash. They are handling the money of others and moving it elsewhere with a polish of untraceability. Because of that they should be vetting the source of the money and vetting the people who sent and received it. It's just about the perfect definition of a money laundering operation. I think centralised options are on borrowed time unless they bury themselves deeply.

I wouldn't call that a money laundering operation, but rather an unlicensed money transmitter. The latter is fairly common and carries much smaller penalties and less stigma. Platforms that only use cryptocurrencies (no banks) are in an interesting position. The US government's attempt to take down BTC-e in 2017 highlights the fact that properly secured cryptocurrency can't be seized. Even if the authorities seize clearnet domains and servers, companies with zero exposure to custodial fiat liabilities can just spin up new domains and servers and secure new wallets. While exchanges would suffer branding issues from such a seizure, a mixer would probably be celebrated. With a properly run mixer, the most that US or EU authorities can do is seize the domain. That's rather embarrassing for them. The public optics around playing cat-and-mouse games with mixers and clearnet domains aren't worth it. That's why we'll see low hanging fruit like Helix -- operated from the US -- taken down, but not others.

Hmm. Not sure. A mixer only has one job - disguise the source of your funds. That's the only reason it exists and that's the only reason people use them. Now of course for most people it's for privacy, not disguising the proceeds of crime. I'm not sure the law can be bothered to delineate the difference. It's the intent of the service provider rather than the needs of the users that they'll go after.

That's not money laundering, which is intentionally disguising the source of illegally obtained funds. Moving around money without doing AML checks is a far cry from money laundering. That's the point -- they need to prove intent. That was easy with Helix because the operator apparently openly advertised it as a money laundering service and directly partnered with AlphaBay for that purpose. That showed intent.

I don't deny that authorities can probably spin facts if they're motivated enough (even if mixers aren't inherently illegal), but at least in Bestmixer's case: It looks like this case also advertised itself as a way to launder money, which made it blatantly illegal on top of everything else. I don't think other mixers should be too concerned just because a random one got taken down.

I'm pretty sure that the authorities are not targeting Harmon because of his mixing service but rather his company is either operating without a license in the USA or it has been proven that his mixing service is an accessory of a proven dark web marketplace that offers illegal activity. There is nothing pointing out that he got arrested because of his mixing service but rather his connection to AlphaBay and committing money laundering through his Mixer. Proving my point is his official indictment file against him My guess is the feds are already giving him a deal for them to catch the "bigger fish" and that is the one who is operating AlphaBay and to shut it down for good just like what they did to Ross Ulbricht and his SilkRoad.