A Dutch developer was arrested by authorities for being involved in money laundering via the crypto-mixing service Tornado Cash.
Officially The Fiscal Information and Investigation Service, a Dutch agency responsible for investigating financial crime investigations, announced Friday’s arrest of a 29 year-old man in Amsterdam.
According to the authority, the man was allegedly involved in criminal financial flows and money laundering via Tornado Cash.
The FIOD stated that multiple arrests are possible in this case. It also pointed out that the Financial Advanced Cyber Team (FACT), launched a criminal investigation into Tornado Cash in June 2022.
According to FACT, Tornado Cash was allegedly used to hide large-scale criminal cash flows, including scams and crypto hacks.
These funds were stolen by hackers belonging to a group thought to be linked with North Korea. According to FACT, Tornado Cash was founded in 2019, and has achieved a turnover of at most seven billion dollars since then,” the announcement states.
This news comes just after the United States Treasury Department placed hundreds of Tornado Cash addresses onto the sanction list of OFAC (Office of Foreign Asset Control). Circle, a major cryptocurrency company and the issuer USD Coin ( USDC), then frozen 75,000 USDC connected to OFAC-sanctioned addresses.
It is now illegal to interact with Tornado Cash smart contract addresses because of the sanctions. For willful noncompliance, penalties can include fines up to $50,000,000 and 10-30 years imprisonment.
The rapid development of events surrounding Tornado Cash has been triggered by the Treasury’s decision. Sources claim that there were a few other people involved in the mix. They were also arrested in Estonia and the United States. Roman Panchenko, a Seattle resident, and Nikita Debev, a Tallinn resident were among the people arrested.
Many people in crypto have voiced their outrage at authorities’ arrests of developers and others involved in Tornado Cash development. Industry observers noted that the principle of a free society does not allow code writers to be charged with creating privacy tools.
This is a dark time. Code is free speech. Open source code is not the responsibility of developers. https://t.co/Y1FUDA4FlZ
— Nik KunkKsl (@nomos_paradox)
August 12, 2022
According to reports, Tornado Cash’s Discord channel has been deleted by the discord group. At the time of writing, its Telegram group remains intact.
Related: Tornado Cash founder reports being kicked from GitHub by industry reaction to sanctions
Tornado Cash, which is based on Ethereum, allows users to hide their crypto transactions in order to protect their anonymity. It does this by creating information trails on the blockchain. Vitalik Buterin, co-founder of Ethereum, claimed that he used the Tornado Cash to give funds to Ukraine in order to protect financial privacy.
