DropBit Founder Accused of Laundering $311 Million in Bitcoin via Darknet Portal

Francisco Memoria

The founder of Bitcoin Lightning Network wallet DropBit, Larry Harmon, is facing federal charges related to the use of darknet portals to allegedly launder $311 million worth of bitcoin.

According to  a report on Cincinnati.com,  citing court documents, Harmon is being charged with conspiracy to launder money and operating a money transmitting business that wasn’t licensed by the Financial Crimes Enforcement Network (FinCEN).

Harmon was arrested last week could face 14 to 17 and a half years in prison, and is being held in custody for supposedly being a flight risk given his involvement with cryptocurrencies. Documents reportedly show he was running a darknet portal called Grams, which has been described as the “Google of the dark net.”

Essentially, Grams was a darknet search engine. Harmon reportedly used the now-defunct website to promote a bitcoin mixing service called Helix, which mixed BTC through a CoinJoin transaction to mask the origins of the funds. These transactions have been associated with money laundering and other illicit activities.

Court records show prosecutors said this was a profitable venture, as users likely passed their BTC through Helix before using it on the now-defunct marketplace AlphaBay.

Harmon advertised Helix to customers on the Darknet as a way to conceal transactions from law enforcement.

Helix is said to have laundered “at least 354,469 bitcoins,” worth about $311 million when it was active. It charged a 2.5% fee which means Harmon could’ve allegedly made 8,900 BTC ($90 million at today’s prices) running the service.

Harmon reportedly shut down both Grams and Helix after authorities started cracking down on darknet portals. DeepDotWeb, a website providing a directory of darknet markets and allegedly profiting from them via affiliate links, was shut down in May 2019.

Podcast host Peter McCormack recently spoke to Harmon’s brother, Gary, who revealed DropBit’s assets have been frozen by the FBI, which removed $4,000 worth of Bitcoin from its Lightning Network node.

As a result, the app is still running thanks to funding from Harmon’s brother.

Featured image via Pixabay.

Bitcoin Investors Reportedly Lose Millions in South African Exit Scam

Michael LaVere
  • VaultAge Solutions CEO Willie Breedt is being accused of making off with millions in investor bitcoin.
  • Breedt allegedly fled the country for Mozambique and has not communicated with investors since December 2019. 

South African cryptocurrency investors are accusing the CEO of VaultAge Solutions of stealing millions in crypto before going on the run. 

According to a report by AllAfrica, Willie Breedt, the CEO of cryptocurrency investment firm VaultAge Solutions, is presumed to be on the run after not making public communications since December 2019. The report claims Breedt was speculated to be staying near the town of Jeffrey’s Bay and that his whereabouts where being looked into by the country’s criminal investigation unit. 

However, South Africans who invested cryptocurrency with the now-defunct firm fear the CEO may have fled the country for Mozambique. 

Breedt is accused of stealing millions from bitcoin investors. The report claims VaultAge Solutions is not registered as a legitimate financial institution with the Financial Services Conduct Authority (FSCA), despite having more than 2000 investors. 

The report quoted investor Lettie Engelbrecht from Krugersdrop, 

We are pensioners and invested R200 000. From December until April, we received payments on the growth of our investment. Since then, we never got any money. We are desperate and living on a shoestring budget.

One South African investor reportedly had deposited more than R6 million ($342,000) with Breedt’s company. 

Breedt delivered a written reply to local outlet News24, explaining, 

I am busy attending to the commitments I have made to members. The commitment is to have all the initial capital paid back by 31 May.

Colonel Katlego Mogale of the Directorate for Priority Crime Investigation (DPCI) said authorities are investigating the case but cannot reveal any more information “at this stage.”

Featured Image Credit: Photo via Pixabay.com