Disappearance of Crypto: The Harmon Case

Larry Harmon, CEO of Coin Ninja and founder of DropBit, was arrested in 2020 on charges of laundering $311 million through BTC.

This arrest, for the purposes of cryptocurrency law enforcement, marked a significant turning point.

Today, it is Gary Harmon, Larry’s younger brother, who is in the spotlight of the authorities. In fact, we see him smiling smugly in a hot tub full of cash and surrounded by scantily clad women.

Cryptocurrencies: the case of the Harmon brothers

The incident, captured on a cellphone photo, as well as proving to be part of his downfall, is proof that Gary had become very rich unexpectedly in the eyes of the US authorities and thus guilty of the wrongdoings he was accused of.

In fact, during the proceedings, the FBI alleged that Gary Harmon had remotely stolen Bitcoin stored in a computer that was already under government control. This computer device had previously been seized by the authorities due to its illegal nature.

Although the relationship was still unclear, especially when it came to identifying a culprit.

Several other reports have subsequently supplemented the first to provide a more informed view of the situation. According to a report, the stolen funds were first seized by authorities from Gary’s brother Larry Harmon.

Another report says that around 713 BTC, worth more than $5 million at the time of the theft, was stolen while stored in a Trezor 1 hardware crypto wallet.

In fact, Larry was accused by the prosecution of having remote access to and steal 713 digital tokens.

The tokens were taken from the “hardware wallet” which was kept in an evidence locker as officials watched helplessly.

Larry Harmon swore at the time that he had nothing to do with the disappearance. However, he has since admitted to laundering $311 million through cryptocurrency transactions.

In addition, Larry Harmon (39) blamed Gary Harmon (30) for helping authorities arrest his younger brother.

After several searches, most of the stolen funds were hidden through Bitcoin mixers such as Chipmixer or Wasabi Wallet. Government agents were able to track around 519 BTC through the mixers.

As for the remaining funds, Harmon deposited them on BlockFi platform.

So while Larry is out on bail awaiting trial near Akron, Gary Harmon is being held in federal prison in Washington DC.

The cases involving the Harmons, also referred to as the crypto brothers, illustrate how the IRS and FBI are succeeding in gathering evidence, even though they still have problems on the blockchain front.

Authorities followed Gary as he went through a maze of anonymous accounts to link digital money to Larry Harmon. But when they tried to catch him, they faced a challenge: how do you surround a mercury resource, like Bitcoin, with a fence?

Cryptocurrency Law Enforcement

In the form of crypto law enforcement, Larry Harmon’s arrest in February 2020, as noted earlier, was a turning point.

In fact, it was the first time anyone was charged with crimes related to “commingling,” a process that makes it significantly more difficult to track transactions that combine tokens from multiple owners and the large sums of money involved.

In addition, Larry Harmon developed the Grams search engine in 2014 to help users search the darknet for weapons, drugs, and illegal hacking services.

Users could pay using the mixing service run by Larry Harmon, Helix, which paid him 2.5% of each transaction.

Admixture advocates in the cryptocurrency community attest to improved privacy, but Larry Harmon promoted Helix to prevent law enforcement from tracking tainted Bitcoin online under the alias “gramsadmin.”

Crypto mix in the US.

The crypto mixing situation, and cryptocurrency mixing platforms, have a bad reputation not only with the US government, but also around the world.

This is because governments in most parts of the world view cryptocurrency mixers as agents who facilitate money laundering.

Later this year, US authorities shut down another crypto-mingling platform called Tornado Cash. A case that has caused a lot of uproar in the cryptocurrency industry, with several actors commenting on the US decision.

It is a relatively complex matter, which Vitalik Buterinthe co-founder of Ethereum, said he used Tornado Cash to make donations in Ukraine so that the anonymity of those receiving the donations can be maintained.

The matter, as can be easily observed, is more delicate and controversial than it appears.