Both companies served as ‘mixers’ or ‘tumblers’ for virtual currencies such as Bitcoin. A ‘mixer’ or ‘tumbler’ accepts currency and transmits it in a manner designed to prevent tracing the transmission back to its source.
The penalty follows Helix and Coin Ninja failings to maintain an effective AML program. For instance, Helix accepted Bitcoin from its customers and transmitted the virtual currency to recipients through a variety of means. Regulators alleged that this anonymising service was used for illicit activities and that Helix and Coin Ninja failed to conduct proper due diligence on its customers.
This is FinCEN’s first enforcement action against a mixer/tumbler for virtual currency. According to FinCEN guidance on virtual currencies published in May 2019, anonymising services for virtual currencies qualify as money transmitters under the BSA.
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