The United States Justice Department (DOJ) has formally sued the founder of Helix cryptocurrency mixer in a bid to recover a $60 million civil penalty.
In the lawsuit, the DOJ indicated that Larry Harmon, who managed the mixer, has failed to pay the civil penalty imposed on him over alleged laxity to implement measures to curb money laundering through the platform, the lawsuit filed on October 19 indicated.
According to the lawsuit, Harmon, through his service, aided criminals in leveraging cryptocurrencies while concealing their activities.
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“Harmon actively aided cybercriminals and other threat actors in circumventing the policies, procedures, and internal controls in place at U.S.-based convertible virtual currency exchanges. Through his services, Harmon promoted unlawful online activities by concealing the nature, the location, the source, the ownership, and the control of the proceeds of online drug sales, amongst other illegal online activities,” the lawsuit said.
Helix mixer investigations outcome
Notably, in 2020, the U.S. Department of Treasury, through the Financial Crimes Enforcement Network (FinCEN), had imposed the fine on Harmon after he was alleged to have violated the federal Bank Secrecy Act (BSA).
“Investigation demonstrated that Mr. Harmon deliberately disregarded his obligations under the BSA and implemented practices that allowed Helix to circumvent the BSA’s requirements,” FinCEN said.
According to the department, the accused operated an unlicensed money-transmitting business. Consequently, in 2021, Harmon pleaded guilty to money laundering conspiracy charges, but he is yet to be sentenced.
It is worth noting that the Treasury Department has increased a crackdown on the crypto mixers, with Ethereum (ETH)-based Tornado Cash emerging as the latest casualty to face sanctions. The service was sanctioned for allegedly failing to implement anti-money laundering policies.
Treasury Department criticism
Notably, the Treasury has come under criticism with a section of the crypto market accusing the state agency of curtailing free speech. In this line, Cryptocurrency exchange Coinbase (NASDAQ: COIN) resolved to fund a lawsuit against the Treasury Department filed by users of Tornado Cash.
Furthermore, the department is also facing a second complaint that asserts that sanctions against Tornado Cash violated its power and targeted investors in cryptocurrencies across the U.S.
Interestingly, part of the department’s criticism stems from questions around the rationale used to sanction crypto policy violations. Notably, the latest actions against crypto mixers have been characterized as a “knee-jerk reaction” by the department to safeguard consumer interest in the wake of the Terra (LUNA) ecosystem crash.
