FinCEN fines $60M bitcoin mixer Helix for money laundering

[Nishizawa]

FinCEN Fines Bitcoin-Mixing CEO $60M in Landmark Crackdown on Helix, Coin Ninja - CoinDesk

In other words, the end of custodial bitcoin mixer. I don't know if it will apply to non-custodial mixers such as wasabi wallet or samourai wallet.

I heard atomic swap between monero and bitcoin is being studied, so maybe it could be a substitute for a mixer.

 

[JohnLocke]

Thank you for sharing the information. They try to crack down on all that is possible money laundering and fraud.

 

[NicolasMaduro]

Was bitcoin mixers used for anything else than shady stuff?

 

[VESTANON]

I said earlier that Crypto was a major threat, to the authorities a few couldnt see far ahead, others downplayed it...and yet another bust towards stifling crypto...My advice Stay ahead of the Curve as quick as we all can...

Its barely the end of 2020 and all this ruckus, i can only imagine what 2021 would usher in, in relation to crypto.

@Martin Everson and et al ..having your takes on the above as OP posted would help keep some ahead of the Crypto dust thats emanating...

NB.somewhere on a current thread a member posted Transferwise introducing fees on EUR etc...ripple effects folks..

 

[Martin Everson]

This is interesting stuff. Aside from typical minor use of bitcoin for crime bitcoins main use is in Asia and Africa now where it is used mainly to circumvent currency controls and move money out of the country especially China and robbing the governments of vital foreign exchange, taxes and bypassing central bank controls....lol.

You see all people are doing in China is buying bitcoin in local currency and selling it outside of China immediately. Then banking the proceeds outside China or putting it into real estate in UK, Canada, Australia etc. They are simply bypassing Chinese capital controls....lol. They are not investing in it at all that is something people in the west are mainly doing.

You can expect some MAJOR crackdowns on crypto use as I can see how it can destabilize small countries very quickly by robbing them of taxes and vital foreign exchange.

As much as I love Bitcoin and crypto in general you got to know whats coming if you interfere with the existing global financial system.

 

[Plavivoz]

Was bitcoin mixers used for anything else than shady stuff?

Using a BTC mixer is a try to archieve privacy. Criminals do not use mixers anymore.
Most shady money runs through binance and huobi not mixers.
Centralized mixers are bulls**t anyway.

From a logical point of view you could ask the same question about USD.
The US is the economy with the highest money laundering volume in the world.
Beside this all wars and bad things in the world are payed in USD.

The only reason why they try to crackdown on decentralized crypto is that no goverment can control it directly. It is not because of shady stuff. Shady stuff does not happen more because of the existence of crypto.

 

[VESTANON]

Exa

---

This is interesting stuff. Aside from typical minor use of bitcoin for crime bitcoins main use is in Asia and Africa now where it is used mainly to circumvent currency controls and move money out of the country especially China and robbing the governments of vital foreign exchange, taxes and bypassing central bank controls....lol.

You see all people are doing in China is buying bitcoin in local currency and selling it outside of China immediately. Then banking the proceeds outside China or putting it into real estate in UK, Canada, Australia etc. They are simply bypassing Chinese capital controls....lol. They are not investing in it at all that is something people in the west are mainly doing.

You can expect some MAJOR crackdowns on crypto use as I can see how it can destabilize small countries very quickly by robbing them of taxes and vital foreign exchange.

As much as I love Bitcoin and crypto in general you got to know whats coming if you interfere with the existing global financial system.

Pin pointed/bulls eye...Crypto sure did interfere with the Worlds financial system, which tooks centuries and decades to propagate into the collosus we all now see...

Crypto the new kid on the block is literally jeering at the bullies and they aint having non of that...

China once again, as the usual suspects, and the antagonists rocking the boat...

 

[NicolasMaduro]

Using a BTC mixer is a try to archieve privacy. Criminals do not use mixers anymore.
Most shady money runs through binance and huobi not mixers.
Centralized mixers are bulls**t anyway.

From a logical point of view you could ask the same question about USD.
The US is the economy with the highest money laundering volume in the world.
Beside this all wars and bad things in the world are payed in USD.

The only reason why they try to crackdown on decentralized crypto is that no goverment can control it directly. It is not because of shady stuff. Shady stuff does not happen more because of the existence of crypto.

I can see in the thread that the mixers was used mainly by Chinese clientele.

Other than that I don´t see the point of achieving privacy(asset protection perhaps?) if your money is clean.

Your comparison with USD seems odd to me.

 

[VESTANON]

Using a BTC mixer is a try to archieve privacy. Criminals do not use mixers anymore.
Most shady money runs through binance and huobi not mixers.
Centralized mixers are bulls**t anyway.

From a logical point of view you could ask the same question about USD.
The US is the economy with the highest money laundering volume in the world.
Beside this all wars and bad things in the world are payed in USD.

The only reason why they try to crackdown on decentralized crypto is that no goverment can control it directly. It is not because of shady stuff. Shady stuff does not happen more because of the existence of crypto.

Well said....mixers aint the good ol problems...

its a major itch, on the side of worlds financial sphere that cant be curtailed,controlled...

the emergence of Dash,Eth and the likes would provide a buffer within the crypto sphere and owners, which thus far is like tryna quench out various crypto flames with a liter of water..

 

[KJK]

Meanwhile announced the same week:

German prosecutors have abandoned their criminal investigation into staff at Deutsche Bank suspected of helping launder dirty money from Russia and neighboring countries through the tiny Estonian branch of Denmark’s largest lender, Danske Bank. The bank washed $230 billion in likely dirty money into and out of accounts that were controlled, through anonymous shell companies, by thousands of secretive figures in Russian and other former Soviet republics and satellite states.

I wonder where will this Larry guy from rural Ohio find $60M to pay the ransom to Fincen. He didn't do anything evil or nefarious in my opinion. His biggest problem wasn't that he created a website/script that tumbles crypto (there are many others), the problem was he likely was quite good at it and promoted and targeted his site to darknet markets.

As was already mentioned by OP in the first post, there are some Bitcoin wallets which now have tumblers built-in into them, so no need to use a custody tumbler, use something open-source, fully decentralized, created by someone anonymous. I don't understand OP's question "will it apply to non-custodial mixers?" Who is Fincen going to fine in that case? The drug dealer? The Chinese dissident? Or perhaps the C# programming language?

And even if he actually has the money (no idea, maybe he has...) the bad thing is this was only the administrative part of the process and simultaneously criminal part is happening and can end up in jail time.

Check out Fincen's mission: "promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use". It reminded me of the motto "To Protect and to Serve" of Los Angeles police that was later adopted by many other local police forces. Role of police isn't to protect you or to serve you; role of police is to protect themselves first of all, to serve their superiors, then the state. If after doing all that, they have some time left, perhaps they will protect you by stopping your car and asking weird questions. It is the same story with Fincen, national security was enforced on this day.

 

[Martin Everson]

I wonder where will this Larry guy from rural Ohio find $60M to pay the ransom to Fincen.

I doubt he has that kind of money and that is the whole point. I think others will think twice after seeing this . His name is ruined and he about to be financially ruined. Worse still:

--- start quote

"Harmon also faces criminal proceedings in U.S. federal court."

--- end quote

His life is about to get a whole lot worse sadly. Never play around with US government...just never is all I can say .

 

[Nishizawa]

As was already mentioned by OP in the first post, there are some Bitcoin wallets which now have tumblers built-in into them, so no need to use a custody tumbler, use something open-source, fully decentralized, created by someone anonymous. I don't understand OP's question "will it apply to non-custodial mixers?" Who is Fincen going to fine in that case? The drug dealer? The Chinese dissident? Or perhaps the C# programming language?

As defi gained attention, the government could no longer ignore DEX and non-custodial wallets.

FATF has declared that the use of a private hardware wallet should be considered a red flag. Also Europol and Department of Justice have called the wasabi wallet and privacy coin the 'most dangerous'. This kind of attention is not a positive signal.

Europol Names Privacy Wallets, Coins, Open Marketplaces as 'Top Threats' in Internet Crime Report - CoinDesk
https://www.justice.gov/ag/page/file/1326061/download

Of course I am an advocate of the "code is speech" argument. Imposing KYC feature on sufficiently decentralized open source software is controversial. But... as you know, sometimes they create regulations that subtly violate freedom and human rights in public indifference. Maybe I'm thinking too negative but at least they won't stand by. They will try to find something they can do...

 

[Martin Everson]

@Nishizawa You said a lot of things I did not know . They are not playing around at all.

I reemphasize we will see some major crackdowns that might shake the industry. Tether case might be a watershed moment:

https://cryptobriefing.com/tether-bitfinex-must-stand-trial-over-850-million-lost-customer-funds/
Tether also not getting a good rep either:

https://uk.news.yahoo.com/unsealed-doj-documents-alleged-money-230221663.html

 

[VESTANON]

As defi gained attention, the government could no longer ignore DEX and non-custodial wallets.

FATF has declared that the use of a private hardware wallet should be considered a red flag. Also Europol and Department of Justice have called the wasabi wallet and privacy coin the 'most dangerous'. This kind of attention is not a positive signal.

Europol Names Privacy Wallets, Coins, Open Marketplaces as 'Top Threats' in Internet Crime Report - CoinDesk
https://www.justice.gov/ag/page/file/1326061/download

Of course I am an advocate of the "code is speech" argument. Imposing KYC feature on sufficiently decentralized open source software is controversial. But... as you know, sometimes they create regulations that subtly violate freedom and human rights in public indifference. Maybe I'm thinking too negative but at least they won't stand by. They will try to find something they can do...

Yup, action and reaction protocols steadily being put in place...

Crypto would surely evolve...as they put more and more emphasis towards trying to curtail it...

 

[VESTANON]

@Nishizawa You said a lot of things I did not know . They are not playing around at all.

I reemphasize we will see some major crackdowns that might shake the industry. Tether case might be a watershed moment:

https://cryptobriefing.com/tether-bitfinex-must-stand-trial-over-850-million-lost-customer-funds/
Tether also not getting a good rep either:

https://uk.news.yahoo.com/unsealed-doj-documents-alleged-money-230221663.html

@Martin Everson ,For sure the post covid Shakedown..shakers Shake,Movers Move...

The current state of affairs must be about control, and the inability to control the crypto scene..

 

[Martin Everson]

FATF has declared that the use of a private hardware wallet should be considered a red flag.

Seems only a matter of time before taxman get sales data from Trezor and Ledger and harass everyone who has bought a hardware wallet.

 

[VESTANON]

@Nishizawa You said a lot of things I did not know . They are not playing around at all.

I reemphasize we will see some major crackdowns that might shake the industry. Tether case might be a watershed moment:

https://cryptobriefing.com/tether-bitfinex-must-stand-trial-over-850-million-lost-customer-funds/
Tether also not getting a good rep either:

https://uk.news.yahoo.com/unsealed-doj-documents-alleged-money-230221663.html

@Martin Everson , Not looking good for tether from this view...DOJ+Going under oath vs State of new york....major shake down on this...

 

[JackAlabama]

Seems only a matter of time before taxman get sales data from Trezor and Ledger and harass everyone who has bought a hardware wallet.

Well these are actually very good password managers for 2FA your email/google/facebook/githab and what not accounts. So it can be easily used in a corporate setting to avoid the most basic mess caused by employees.

As far as crypto is concerned, this is now clearly the "then they fight you" stage.

But what do you think are the options here?

Recently, some powerful people invested in it and became, surprisingly, quite vocal about it. Maybe even more people did, which we have no clue about (Kev Oleary comes to mind).

* Banning it outright would make the price go sky-high as with other banned goods and it would legitimate it in the eyes of the unsuspecting public, why would a ridiculed joke need ban?
So, shadow-banning seems more likely way of doing it.

* I see an actual collapse of the control matrix much more likely then an effective ban. After all even the military does not like to be paid in worthless paper or digits.

* Trying to outcompete it with cbdc might be the first choice.

I hope it encourages pockets of freedom breaking away of the financial control grid which is getting tighter with each passing day.

 

[VESTANON]

Well these are actually very good password managers for 2FA your email/google/facebook/githab and what not accounts. So it can be easily used in a corporate setting to avoid the most basic mess caused by employees.

As far as crypto is concerned, this is now clearly the "then they fight you" stage.

But what do you think are the options here?

Recently, some powerful people invested in it and became, surprisingly, quite vocal about it. Maybe even more people did, which we have no clue about (Kev Oleary comes to mind).

* Banning it outright would make the price go sky-high as with other banned goods and it would legitimate it in the eyes of the unsuspecting public, why would a ridiculed joke need ban?
So, shadow-banning seems more likely way of doing it.

* I see an actual collapse of the control matrix much more likely then an effective ban. After all even the military does not like to be paid in worthless paper or digits.

* Trying to outcompete it with cbdc might be the first choice.

I hope it encourages pockets of freedom breaking away of the financial control grid which is getting tighter with each passing day.

Nice analysis of the scenario from a really different angle..

 

[JackAlabama]

Nice analysis of the scenario from a really different angle..

Thanks. But honestly, at this point in 2020, somehow I feel like all bets are off. Who knows whats gonna happen.