The Man Behind Helix, A Bitcoin Mixer, Pleads Guilty To Laundering Over $300M

Bitcoin is not a useful tool for money launderers and here’s proof. 38-years-old Larry Dean Harmon admitted to being the operator of Helix, a Bitcoin Mixer service that operated on the Darknet. According to the US Department of Justice, “Harmon advertised Helix to customers on the Darknet to conceal transactions from law enforcement.” What was this man thinking? 

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The press release continues:

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Harmon admitted that Helix partnered with several Darknet markets, including AlphaBay, Evolution, Cloud 9 and others, to provide bitcoin money laundering services for market customers. In total, Helix moved over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets. Harmon further admitted that he conspired with Darknet vendors and marketplace administrators to launder such bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.

The blockchain sees it all and registers every transaction forever. A mixer, also known as a tumbler, is a service that seeks to anonymize transactions. They pool together funds from several parties, mix them up, and serve supposedly clean coins to everyone involved. At the very least, the coins can’t be traced to a specific address. For that, they charge a fee.

BTCUSD price chart for 08/19/2021 - TradingView

BTCUSD price chart for 08/19/2021 - TradingView

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Even Helix Didn’t Know How Much It Was Laundering. And Bitcoin Is Money

Betraying everything that’s sacred, Larry Dean Harmon’s defense was that he wasn’t guilty because Bitcoin is not money. The law went on the record and confirmed what Bitcoiners have been saying for years, the Washington Post reports

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A line of reasoning rejected by Chief U.S. District Judge Beryl A. Howell.“ ‘Money,’ ” she wrote, “commonly means a medium of exchange, method of payment, or store of value. Bitcoin is these things.”

That’s on the record. The law knows that Bitcoin is money.

In any case, one thing about mixers is that there are no humans involved in the process. The system does it all. In Helix’s case, apparently, no one even knew how much money they were laundering. quotes Harmon’s defense attorney Charles Flood:

“One interesting thing about this case is there was a double-blind system Harmon had set up with Helix,” Flood said in the federal courtroom on Wednesday. “While he completely acknowledges that he violated the law and was in fact laundering money and knew it was drug proceeds … he does not know the exact amount laundered,” Flood added.

What Will The Law Do With Larry Dean Harmon?

For the punishment, we quote once again the original press release:

As part of his plea, Harmon also agreed to the forfeiture of more than 4,400 bitcoin, valued at more than $200 million at today’s prices, and other seized properties that were involved in the money laundering conspiracy. Harmon will be sentenced at a date to be determined and faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, a term of supervised release of not more than three years, and mandatory restitution.


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This all leads to our original statement, Bitcoin is not a useful tool for money launderers. Or for criminals in general. To drive the point home, the Wall Street Journal quotes Ari Redbord. He’s “a former assistant U.S. attorney for the District of Columbia and a former senior adviser at Treasury,” and says:

The guilty plea shows U.S. law enforcement is pursuing cryptocurrency mixers with connections to the Darknet and illicit activities, while the transparency of blockchain enables them to trace the funds.

“The nature of cryptocurrency is to allow law enforcement to have unique visibility on financial flow where they never had before.”

And that’s another thing Bitcoiners have been saying all along.

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Alleged $366M Bitcoin mixer busted after analysis of 10 years of blockchain data

U.S. authorities have arrested the alleged mastermind behind a multi-million darknet-based BTC mixing service, Bitcoin Fog, after analyzing 10 years of blockchain data.

Authorities have issued a chilling warning to other users of illegal blockchain services: Anything you do today may come back to haunt you as “this activity is on this ledger forever” and ever-more sophisticated analytics technology can track down crimes committed years earlier.

For approximately a decade, Bitcoin Fog has enabled users to conceal the origin and destination of its users’ crypto assets. However, the Internal Revenue Service is charging Russian-Swedish citizen, Roman Sterlingov, with laundering more than 1.2 million Bitcoin worth $336 million while serving as the website’s administrator.

Sterlingov was arrested on April 27 in Los Angeles, with the IRS estimating he received commissions of between 2% and 2.5% for mixing services at the time of each transaction — worth roughly $8 million then but exponentially more today.

Authorities estimate at least 23% of the Bitcoin that flowed through the mixing service was transferred to darknet-based narcotics marketplaces such as Silk Road.

Sterlingov’s arrest was the product of authorities fastidiously unpicking the web of BTC transactions associated with the mixer service dating back to 2011, using the Bitcoin blockchain to identify the site’s operator.

Sterlingov founded the website in late 2011 under a Japanese pseudonym meaning “Happy New Year, ” spruiking Bitcoin Fog as eliminating any chance of authorities “finding your payments and making it impossible to prove any connection between a deposit and a withdraw inside our service.”

In 2019, undercover IRS agents engaged Sterlingov through the platform, claiming they wished to launder the profits from ecstasy sales. The transactions were processed without a reply.

Law enforcement was able to identify that Sterlingov had paid for Bitcoin Fog’s server hosting expenses using the now-defunct digital currency Liberty Reserve, allowing them to trace when he bought the Liberty Reserve using Bitcoin transferred from the collapsed pioneer crypto exchange, Mt Gox.

From there, the IRS was able to identify the home address and phone number that Sterlingov had registered to his account, and eventually a Google Drive account containing instructions outlining the steps he took to purchase his Liberty Reserve coins.

“This is yet another example of how investigators with the right tools can leverage the transparency of cryptocurrency to follow the flow of illicit funds,” said Jonathan Levin, co-founder of blockchain forensics firm, Chainalysis.

Computer scientist, Sarah Meiklejohn, stated:

“With blockchain analytics, the thing we say over and over is that all this activity is on this ledger forever, and if you did something bad 10 years ago you can be caught and arrested for it today.”

Despite Sterlingov’s detention Bitcoin Fog remains online, although it is unclear who is operating the site.