Suspected developer of crypto mixer Tornado Cash arrested – TechCrunch

The Dutch government agency responsible for investigating financial crimes said it has arrested a person suspected of being a developer of US-sanctioned crypto-mingling service Tornado Cash in a move that has rattled some crypto and privacy campaigners.

The Fiscal Information and Investigation Service said on Friday that the arrested 29-year-old man is suspected of being involved in “concealing criminal financial flows and facilitating money laundering” through the popular crypto-mixing service.

“More arrests are not ruled out,” it said. The agency added that it arrested the person in Amsterdam.

The move comes days after the US government sanctioned Tornado Cash – a service that allows users to mask their transactions by mixing funds from different sources before sending them to their final destination – for its role in enabling the laundering of billions of dollars of cryptocurrency . through its platform.

Tornado Cash has been used to launder more than $7 billion in virtual currency since it was created in 2019, the US Treasury Department said. The platform was also used to launder funds stolen in the $600 million Ronin Bridge breach and a $100 million Harmony Bridge compromise earlier this year, according to security firms.

At least $1.5 billion in proceeds of crime such as ransomware, hacks and fraud have been laundered through Tornado Cash to date, analytics platform Elliptic told TechCrunch earlier this week.

Crypto and privacy advocates have criticized the Dutch agency’s move, arguing that mainstream payment railways have been used for far more money laundering.

The Dutch agency’s action further illustrates the growing interest of authorities around the world in so-called crypto mixers. The Office of Foreign Asset Control earlier this year sanctioned Blender, another crypto mixing service.

The Dutch agency’s Financial Advanced Cyber ​​​​Team “suspects that through Tornado Cash has been used to hide large criminal cash flows, including from (online) thefts of cryptocurrencies (so-called cryptohacks and frauds). These included funds stolen through hacks by a group that believed to be associated with North Korea Tornado Cash started in 2019 and according to FACT it has since achieved a turnover of at least seven billion dollars, the statement said.

In the wake of the US sanction, a number of firms including Github, Circle, Alchemy and Infura have suspended or terminated accounts linked to Tornado Cash.

Tornado Cash’s token TORN fell to $13.7 from $16.5 on the news, extending its decline this month. The token has fallen more than 50% in the past seven days, according to CoinMarketCap.