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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: 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?
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