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.
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.