US authorities charge DropBit CEO for allegedly laundering $311M in bitcoin

Legal • February 13, 2020, 4:11AM EST
UPDATED: February 13, 2020, 11:06AM EST
Oleg Samoylov/ shutterstock.com

Larry Dean Harmon, CEO of crypto wallet provider DropBit, has been indicted for allegedly laundering $311 million in bitcoin for darknet transactions.

Federal authorities charged Harmon, 36, in December and arrested him on February 6 for conspiracy to launder money, operating an unlicensed money transmitter business and money transmission without a license, Cleveland reported Wednesday, citing an indictment document.

Harmon is accused of selling illicit drugs via darknet marketplace AlphaBay, which federal authorities shut down in 2017. The marketplace was a “major” source of Fentanyl and Heroin.

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During 2014-2017, Harmon is said to have laundered at least 354,468 bitcoins (worth over $311 million at the time) via his mixing service called Helix. Those bitcoins are worth over $3.7 billion at today's prices.

Federal prosecutors are reportedly seeking millions of dollars in financial penalties and want Harmon to forfeit his properties.

Jake Chervinsky, general counsel at decentralized finance (DeFi) lending protocol startup Compound, described the case as “tough" on Twitter, and said the Department of Justice is “going too far by charging unlicensed money transmission offenses.”

Crypto podcast host Peter McCormack tweeted Wednesday that Harmon has been denied bond as he is "considered a flight risk even though they have confiscated all his assets," citing a discussion with Harmon's brother Gary Harmon.

DropBit, however, is expected to continue running, said McCormack, as Gary Harmon and the app's developers are using their funds.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.

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