The US Department of Justice is taking another similar altcoin project to court after OFAC’s decisions to sanction Tornado Cash.
This altcoin platform is targeted by the US Department of Justice
The US Department of Justice (DOJ) has officially sued the founder of the Helix mixer to get $60 million back. The lawsuit said Helix founder Larry Harmon failed to pay the fine imposed on him for alleged laxity in enforcing anti-money laundering measures through the platform. The founder was fined $60 million last month for violating the Bank Secrecy Act (BSA) and enforcement regulations. It is now under the spotlight for allegedly helping criminals leverage cryptocurrencies while hiding their activities through its service.
Allegedly, Harmon operated the crypto mixer Helix without registering Helix from 2014 to 2017. He was also the head of the unregistered money services company (MSB) Coin Ninja from 2017 to 2020. He is currently on trial in the U.S. District Court for the District of Columbia on charges of conspiracy to launder money and operating a business that conducts unlicensed money transfers in connection with Helix’s operation. It helps criminals leverage cryptocurrencies while hiding their activities, according to the US Department of Justice (DOJ):
Harmon has actively assisted cybercriminals and other threat actors to circumvent the policies, procedures, and internal controls in place on US-based convertible cryptocurrency exchanges. Through its services, Harmon promoted illegal online activities by concealing the nature, location, source, ownership and control of online drug sales proceeds, among other illegal online activities.
background of the case
Specifically, in 2020, the U.S. Treasury Department, through the Financial Crimes Enforcement Network (FinCEN), imposed fines after Harmon was allegedly violated the federal Bank Secrecy Act (BSA). The allegations made by FinCEN against the founder at that time were as follows:
The investigation showed that Harmon deliberately ignored its obligations under the BSA and implemented practices that allowed Helix to circumvent BSA’s requirements.
According to the department, the founder is in an unlicensed money transfer business. As a result, in 2021, Harmon pleaded guilty to money laundering conspiracy charges. However, he has not yet been convicted. It is worth noting that the Treasury Department has stepped up the pressure on crypto mixers with the emergence of Ethereum (ETH)-based Tornado Cash as the latest casualty to face sanctions. The service was penalized for allegedly failing to enforce anti-money laundering policies.
Treasury Department review
In particular, the U.S. Treasury Department has faced criticism, accusing a segment of the crypto market and the government agency of curtailing freedom of expression. Accordingly, cryptocurrency exchange Coinbase has decided to fund a lawsuit filed by Tornado Cash users against the Treasury Department.
The ministry is also facing a second complaint alleging that it violated the strength of the sanctions against Tornado Cash and targeted crypto investors across the US.
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