The founder of Bitcoin Lightning Network wallet DropBit, Larry Harmon, is facing federal charges related to the use of darknet portals to allegedly launder $311 million worth of bitcoin.
According to a report on Cincinnati.com, citing court documents, Harmon is being charged with conspiracy to launder money and operating a money transmitting business that wasnt licensed by the Financial Crimes Enforcement Network (FinCEN).
Harmon was arrested last week could face 14 to 17 and a half years in prison, and is being held in custody for supposedly being a flight risk given his involvement with cryptocurrencies. Documents reportedly show he was running a darknet portal called Grams, which has been described as the Google of the dark net.
Essentially, Grams was a darknet search engine. Harmon reportedly used the now-defunct website to promote a bitcoin mixing service called Helix, which mixed BTC through a CoinJoin transaction to mask the origins of the funds. These transactions have been associated with money laundering and other illicit activities.
Court records show prosecutors said this was a profitable venture, as users likely passed their BTC through Helix before using it on the now-defunct marketplace AlphaBay.
Harmon advertised Helix to customers on the Darknet as a way to conceal transactions from law enforcement.
Helix is said to have laundered at least 354,469 bitcoins, worth about $311 million when it was active. It charged a 2.5% fee which means Harmon couldve allegedly made 8,900 BTC ($90 million at todays prices) running the service.
Harmon reportedly shut down both Grams and Helix after authorities started cracking down on darknet portals. DeepDotWeb, a website providing a directory of darknet markets and allegedly profiting from them via affiliate links, was shut down in May 201 ...