Larry Dean Harmon, CEO of Coin Ninja and the Bitcoin wallet developer DropBit, has been arrested by F.B.I. on suspicion of laundering more than $300 million through the now defunct AlphaBay darknet platform. He faces up to 30 years in prison.
According to Cleveland.com, 36-year-old Harmon was charged with conspiracy to launder money and manage an unlicensed money transfer service.
The most noteworthy point in the charge is the mention of the Helix coin mixing service, which also belongs to Harmon.
According to the prosecution, in the period from 2014 to 2017, Harmon sold illicit drugs through AlphaBay, sending the received bitcoins through Helix. It is estimated that during this time, 354,468 BTC was laundered – $311 million at the time of the transaction, or more than $3.7 billion at current prices.
The prosecution also claims that the Helix mixer was one of the partners of AlphaBay, whose operators recommended its customers to use this particular service. It is alleged that Harmon promoted Helix as a tool to hide transactions from law enforcement.
In addition, CEO Coin Ninja owned a darknet search engine called Grams, often used in a single Helix bundle. Some customers have also used darknet markets such as AlphaBay, Agora Market, Nucleus, and Dream Market.
According to the totality of the charges, Harmon faces up to 30 years in prison. The prosecution also asks Harmon to be fined several million dollars and confiscate his property.
Harmon faces up to 30 years in prison
Shortly after the news of Harmon’s arrest, Peter McCormack, host of the popular What Bitcoin Did podcast, announced that although he appreciates financial privacy and personal freedom, he suspends DropBit ads on his site.
He also said that he spoke with Coin Ninja CEO Brother Gary Harmon. According to the latter, Larry Harmon was denied access to freedom on bail, as the court considered the probability of his disappearance to be high. Moreover, all funds were already confiscated from him, including $4,000 in bitcoins that were in the Lightning node.
Recall that the AlphaBay site was closed in the summer of 2017. Before this market place was in the top 10 darknet in terms of the number of users and transaction volumes. Alphabay mainly sold narcotic substances, data from stolen bank cards, various databases, as well as all kinds of manuals and instructions for novice cybercriminals. Transactions on the site were carried out for bitcoins, Ethereum, Monero, Dash.