The FinCEN Fines $60 Million Civil Penalty over Helix and Coin Ninja Operator

The Financial Crimes Enforcement Network (FinCEN) penalized Larry Dean Harmon, the founder, administrator, and primary operator of Helix and Coin Ninja with $60 million for violating the Bank Secrecy Act (BSA) and its implementing regulations. Helix and Coin Ninja were convertible virtual currency “mixers,” or “tumblers”.

Harmon controlled Hexlix as an unregistered money service business (MSB) from 2014 to 2017 and Coin Ninja from 2017 to 2020. FinCEN found that Helix conducted over 1,225,000 transactions for its customers and was associated with virtual currency wallet addresses that sent or received over $311 million dollars from June 2014 through December 2017. At least 356,000 bitcoin were transactioned through Helix.

Larry operated Helix as a bitcoin mixer, or tumbler, and advertised its service in the darkest spaces of the internet as a way for customers to anonymously pay for things like drugs, guns. Subsequently, he founded Coin Ninja, which operated as an unregistered MSB and in the same manner as Helix.

As FinCEN clarified in its 2013 Guidance, exchangers and administrators of convertible virtual currency are money transmitters under the BSA.  As such, they have an obligation to register with FinCEN; to develop, implement, and maintain an anti-money laundering compliance program; and to meet all applicable reporting and recordkeeping requirements.  FinCEN issued further clarification in 2019 that financial institutions that are mixers and tumblers of convertible virtual currency must also meet these same requirements.

FinCEN’s investigation revealed that Mr. Harmon willfully violated the BSA’s registration, program, and reporting requirements by failing to register as a MSB, failing to implement and maintain an effective anti-money laundering program, and failing to report suspicious activities.