CEO of Coin Ninja arrested on suspicion of Bitcoin money laundering of $311 million

Larry Harmon, CEO of Bitcoin’s media site Coin Ninja and founder of crypto-wallet provider DropBit, is facing investigations related to his use of Bitcoin privacy tools.

The U.S. Attorney’s Office has filed charges against Harmon for conspiracy to launder money and operate a payment service FinCEN license.

According to an arrest warrant filed earlier this month, Harmon is alleged to have laundered over 354,468 Bitcoins (BTC) with a converted value of $311 million. Users of a privacy tool called Helix and a Darknet search engine called Grams were able to make transactions on the Darknet marketplace AlphaBay, which was shut down in 2017.

Helix allowed its users to shuffle coins before they were issued through a CoinJoin transaction. The mixing of Bitcoin has been linked to money laundering and other illegal activities.

Harmon faces up to 30 years in prison for these alleged crimes.


Harmon denies bail

Journalist and podcaster Peter McCormack reportedly spoke with Harmon’s brother Gary Harmon. He said that Coin Ninja’s assets have been frozen and the FBI has removed $4,000 of Bitcoin from its Lightning Network node.

According to McGormack, Harmon was denied bail on flight risk despite the seizure of all his assets.

The prosecutor’s request to hold Harmon shows that it is assumed that Harmon would not appear in court after bail was posted. The latter had “substantial family ties outside the United States” and would be “subject to a long prison sentence if convicted”.

DropBit attracted some attention among Bitcoin users, particularly because it allowed them to send BTC on-chain and over the Lightning Network using Twitter handles or phone numbers. Since DropBit’s funds were frozen, Gary Harmon and his developers have been financing the wallet service’s operations themselves, McCormack said.