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Ohio man pleads guilty to running illegal bitcoin-laundering service

An Ohio man has pleaded guilty to laundering bitcoin to hide illicit funds.
An Ohio man has pleaded guilty to laundering bitcoin to hide illicit funds. (Dado Ruvic/Reuters)

An Ohio man pleaded guilty Wednesday to laundering hundreds of millions of dollars in cryptocurrency, acknowledging that he targeted drug traffickers and other criminals who sought to evade law enforcement scrutiny.

Larry Harmon, 38, said in D.C. federal court that he plans to cooperate with law enforcement amid a crackdown on services like his that “mix” or “tumble” bitcoin to hide their origins.

The Treasury Department fined Harmon $60 million last year in what the government said was the first such penalty levied on a bitcoin mixer. Earlier this year, the Justice Department charged the alleged operator of another cryptocurrency-laundering site with similar crimes.

According to court records, Harmon operated a service called “Helix” from 2014 to 2017 that connected to large marketplaces where drugs and other illegal items were sold. Those markets operated on the dark net, accessible only through anonymizing software. Prosecutors estimate that more than $300 million passed through his service; Harmon might dispute that number at sentencing.

“One interesting thing about this is case is there was a double-blind system Harmon had set up with Helix,” defense attorney Charles Flood said in court 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.”

According to the Financial Crimes Enforcement Network, Helix also laundered funds for identity thieves, child exploitation websites and neo-Nazi groups.

Harmon had previously argued that he was not guilty because bitcoin is not “money” as defined by D.C. law, 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.”

No sentencing date has been set; prosecutors said they first wanted to give Harmon time to work with investigators. There are “a number of possible avenues for cooperation,” Assistant U.S. Attorney Christopher Brown said.

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