Larry Harmon, the CEO of Coin Ninja, the Bitcoin media site; and the Founder of DropBit, the crypto wallet provider, is facing federal charges related to his use of Bitcoin privacy tools.
The CEO of Bitcoin media site Coin Ninja and founder of crypto wallet provider DropBit has been arrested for allegedly laundering $311 million with Bitcoin toolshttps://t.co/ATfIkbH3gC — อะไรที่เกิดจากความรัก สวยงามเสมอ (@rKSgDSbKhw46xla) February 13, 2020
It has been reported that United States federal prosecutors are charging Harmon with conspiracy to launder money and operating a money transmitting business without a FinCEN license.
However, according to an arrest warrant filed earlier this month, Harmon allegedly laundered over 354,468 Bitcoins (BTC) (worth $311 million at the time of the transactions), allowing the users of a privacy tool named Helix, and a darknet search engine named Grams, to make transactions on AlphaBay, a known dark market that was shut down in 2017.
Helix allowed users to mix the coins before spending through a CoinJoin transaction. The mixing of coins has been associated with money laundering and other illicit activities.
As per the report, Harmon is facing a 30-year prison sentence for these alleged crimes.
Peter McCormack, the Journalist, and Podcaster, reportedly spoke to Harmon’s brother, Gary Harmon, who said that Coin Ninja’s assets have been frozen and that the FBI has removed $4,000 in Bitcoin from its Lightning Network node.
1/ Re: Dropbit… …CEO Larry Harmon has been arrested and is currently in Youngstown Ohio federal jail. Charged with: – Conspiracy to launder money instruments – Operating an unlicensed money transmitting business He faces up to 30 years. — Peter McCormack (@PeterMcCormack) February 13, 2020
According to McCormack, Larry has been denied release on bail bond because he was deemed a flight risk, “even though they have confiscated all his assets.”
However, the state attorney’s motion to detain Harmon shows that the state believes that Harmon will not reasonably appear in court if permitted a release on bail as he has “significant family ties outside the United States” and is “subject to a lengthy period of incarceration if convicted.
DropBit has gained some attention among Bitcoiners, particularly because it allows the users to send BTC on-chain and over the Lightning Network using Twitter handles or phone numbers.
Thus, according to McCormack, since DropBit’s funds have been frozen, Gary Harmon and its developers are personally funding the wallet’s operations.