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14 February 2020, 10:00 am

Ohio Man Arrested For Running Bitcoin Mixing Service That Laundered $300 Million

Ohio Man Arrested For Running Bitcoin Mixing Service That Laundered $300 Million

U.S. authorities have arrested Larry Harmon of Akron, Ohio, for running a "Bitcoin mixer" service on the dark web that helped criminals disguise the origin of Bitcoin transactions. Harmon is "accused in a three-count indictment (PDF) for operating Helix, an online website located on the dark web," reports ZDNet. It is the first case the DOJ has brought against a Bitcoin mixer. From the report: Helix functioned as a Bitcoin mixer (Bitcoin tumbler), a type of service that takes funds from a user, split the sum into small parts, and using thousands of transactions, sends and reassembles the original funds at a new Bitcoin address, in an effort to hide the original funds under a cloud of micro-transactions. "The sole purpose of Harmon's operation was to conceal criminal transactions from law enforcement on the Darknet, and because of our growing expertise in this area, he could not make good on that promise," Don Fort, Chief, IRS Criminal Investigation, said today in a DOJ press release. "Working in tandem with other sites, he sought to be the 'go-to' money launderer on the Darknet, but our investigators once again played the role of criminal disrupters, unraveling the interlinked web from one tentacle to another," Fort said. According to DOJ documents, Harmon ran Helix as a secondary project attached to his primary service called Grams, a search engine that aggregated listings from multiple dark web drugs-related marketplaces. Grams allowed users to search for drugs and find the cheapest offers in their areas. Helix was provided as a way for potential buyers to hide their identity when buying products. The DOJ says Harmon operated Helix since 2014 and helped launder more than 350,000 bitcoins, valued at around $300 million at the time of their transactions -- valued $3.5 billion today. Investigators say that as the service grew, Harmon also partnered with other dark web services. According to the indictment, Harmon joined forces with AlphaBay, the biggest dark web marketplace for illegal products at the time, with AlphaBay recommending Helix to its users as a safe Bitcoin tumbling option.

Read more of this story at Slashdot.