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US DOJ Calls Bitcoin Mixing 'a Crime' in Arrest of Software Developer - CoinDesk:
Larry Harmon was arrested earlier this week for allegedly participating in a money-laundering conspiracy worth more than $300 million in cryptocurrency involving darknet marketplace AlphaBay. However, the family of the Coin Ninja CEO claims he was never involved with AlphaBay.
Harmon's case raises pressing questions about developer liability in the crypto industry.
In addition to the crypto media site Coin Ninja, Harmon created the bitcoin mixer Helix, which sends transactions out in mixed batches so individual payments are harder to trace. In its indictment, Department of Justice prosecutors refer to Helix as a "money transmitting and money laundering business."
"Helix enabled customers, for a fee, to send bitcoins to designated recipients in a manner which was designed to conceal and obfuscate the source or owner of the bitcoins," the indictment continues. "This type of service is commonly referred to as a bitcoin 'mixer' or 'tumbler.'"
In a statement Thursday, Justice Department Assistant Attorney General Brian Benczkowski made the department's views on bitcoin mixers clear. "This indictment underscores that seeking to obscure virtual currency transactions in this way is a crime," he said.
Harmon's brother and Coin Ninja coworker, Gary Harmon, said Helix did not directly partner with AlphaBay and that the darknet market recommended the mixer without Larry's permission or input. (Helix shut down in 2017; AlphaBay was seized by the FBI in July 2017.)
[...] Many bitcoin experts are concerned this could establish a precedent where simply creating a bitcoin mixer is seen, in itself, as a money-laundering conspiracy.
Bitcoin Core contributor Matt Corallo tweeted that if this accusation was upheld by the federal court in Washington, D.C., it would be "the beginning of the end."
CORRECTION (Feb. 14, 04:00 UTC): This article has been updated to clarify the difference between bitcoin mixers that custody digital assets and ones where users retain custody.
(Score: 0) by Anonymous Coward on Saturday February 15 2020, @01:50AM (16 children)
I can be anonymous with cash, unless I'm tracked some other way. They're essentially arguing that financial anonymity is illegal if it happens on the Internet. Absurd.
(Score: 2, Insightful) by Anonymous Coward on Saturday February 15 2020, @01:53AM (1 child)
If they (LE and other govt agencies) could find a way to make cash illegal they would.
(Score: 3, Insightful) by MostCynical on Saturday February 15 2020, @05:54AM
They're trying [savings.com.au]
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 1, Insightful) by Anonymous Coward on Saturday February 15 2020, @01:55AM (1 child)
Well, Mr Harmon can, for the low price of a couple $10k, stand up in court and have someone make that argument for him over a year or so. Perhaps a judge will agree with him. Or he can just plead guilty and sit off a year in a low security prison camp and get on with his life.
(Score: 0) by Anonymous Coward on Saturday February 15 2020, @05:17PM
Conversely, if the judge does not agree, get sentenced to 20 years on even a single count of money laundering.
(Score: 4, Informative) by stormwyrm on Saturday February 15 2020, @02:26AM (5 children)
Numquam ponenda est pluralitas sine necessitate.
(Score: 1) by Ethanol-fueled on Saturday February 15 2020, @03:28AM (1 child)
Well if any burgeoning crooks heed your advice, perhaps they should watch out. [wikipedia.org]
Also, LOL smurfing
(Score: 1, Informative) by Anonymous Coward on Saturday February 15 2020, @03:35AM
Its because all the law enforcement officers who try and stop this look like Gargamel.
(Score: 3, Touché) by mhajicek on Saturday February 15 2020, @04:14AM (1 child)
In 1957 $10,000 was a lot of money.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 1, Informative) by Anonymous Coward on Saturday February 15 2020, @04:50AM
Yes, it was. In 1986, when that law was passed, $39k would buy you an equivalent amount of stuff. Now you'd have to spend $92k of today's money.
(Score: 0) by Anonymous Coward on Saturday February 15 2020, @07:01PM
that piece of shit needs to be ammended or abolished.
(Score: 5, Informative) by JoeMerchant on Saturday February 15 2020, @04:00AM (4 children)
If you walk around with $10K+ in cash, you're hardly anonymous - you are photographed and tracked everywhere you are seen with that much cash. Ever notice how thick a stack of 100 $100 bills is? That's not an accident, the higher denominations used to exist but were intentionally eliminated.
Old days, purchasing a house some people would literally go to the bank and withdraw the amount in cash for payment - they'd hire a sheriff's deputy to escort them, the furthest thing from an anonymous transaction (also, recorded in the county record books...)
Bitcoin is traceable, period. If it weren't, it could be double-spent. By making a "tumbler" that advertises itself as making traceability difficult, these people have painted a big red bull's eye on themselves, and DOJ has finally gotten around to caring about them. I seriously doubt that a thorough analysis of transactions through the tumbler would adequately protect the anonymity of the parties involved, not unless the anonymous parties amounted to a small fraction of the total volume being transacted through the tumbler during the time period of interest. Even then, the party operating the tumbler could probably ID them, and this is why they're targeted as running a money laundering operation for hire.
🌻🌻 [google.com]
(Score: 2) by epitaxial on Saturday February 15 2020, @03:56PM (3 children)
Calling bullshit on your good old days memories of everyone buying houses for straight cash. If that were true then the realty office would need armed guards instead of the bank.
(Score: 0) by Anonymous Coward on Sunday February 16 2020, @12:17AM (1 child)
Not really. They facilitate the transaction, the bank officer or the seller actually walks out with the money. And they can get security of their own.
It wouldn't even have been that cumbersome. A $6k house would have been 6 thousand-dollar bills.
(Score: 2) by epitaxial on Monday February 17 2020, @03:28PM
Yeah the good old 1950s, tons of $1000 bills in circulation. Never heard of a check I suppose...
(Score: 2) by JoeMerchant on Sunday February 16 2020, @02:29PM
some != everyone
and, even if you're mortgaging, where do you think you get that mortgage from?
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Saturday February 15 2020, @12:46PM
They're secretly tracking all your cash purchases too. Why else would there be a serial number on every dollar bill?