Gary James Harmon of Ohio was sentenced to four years and three months in prison for stealing 712 bitcoin belonging to his brother, the US Department of Justice said.
harmony pleaded guilty on criminal charges in January, facing one count each of wire fraud and obstruction of justice, with a combined maximum sentence of 40 years.
The 712 bitcoins in question – worth over $21 million at today’s prices – were stolen by Harmon after his brother’s arrest in February 2020. According to the Justice Department, the funds were worth around $4.8 million at the time of the withdrawal.
Harmon’s brother, Larry Dean Harmon, was arrested in February 2020 for operating a coin mixing service called Helix, which processed over 350,000 bitcoin between 2014 and 2017 and worked with several dark web markets, the Justice Department said.
Larry Dean Harmon later pled guilty to a money laundering conspiracy and charges related to improperly transferring funds in 2021. In addition to the criminal charges, Larry Dean Harmon was fined $60 million by the Financial Crimes Enforcement Network (FinCEN). first penalty again raised a bitcoin mixer.
As part of that prosecution, law enforcement seized several assets, including a “cryptocurrency storage device” that was initially inaccessible due to certain security features, the Justice Department said.
Gary James Harmon was able to “secretly” send himself 712 bitcoins to the device by recreating bitcoin wallets using his brother’s credentials. Harmon then further laundered the assets and sent the freshly taken bitcoins to two other online mixing services, authorities said.
When he agreed to hand over assets derived from the 712 Bitcoin he illegally took, he agreed to forfeit cryptocurrencies including 17.4 million Dogecoin, around 647 Bitcoin and just over 2 Ethereum – those from the Justice Department in total were valued at over $20 million.
Although proponents of coin mixers have called them necessary tools To protect the privacy of crypto transactions, government officials have targeted the services, deriding them as crucial for hackers and other bad actors.
Coin shufflers obscure the source and destination of funds by aggregating different transactions. And last summer, the US Treasury announced sanctions against coin mixer Tornado Cash, generally forbidden Prevent people in the US from engaging with the application.
The Ministry of Finance said Tornado Cash is being used by North Korea’s state-sponsored hacking organization Lazarus Group. The move was condemned by politicians including MP Tom Emmer and whistleblower Edward Snowden, who described it as “do or die“Hold on for crypto.
Cryptopolitics nonprofit Coin Center is currently suing the Treasury, to accuse it the government’s overreach in blacklisting the tool. And although his trial is pending, a Dutch court recently ruled that a Tornado Cash developer named Alexey Pertsev could be released on bail after nine months in prison.
Noting his freedom on Twitter on Friday, Pertsev wondered what had been going on in the crypto space since his arrest last August.
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