The Dutch Fiscal Information and Investigation Service (FIOD) has arrested the developer of Tornado Cash on account of suspected money laundering through the cryptocurrency mixing service.
The arrest of a 29-year-old man in Amsterdam was officially announced on Friday by the Fiscal Information and Investigation Service (FIOD), a Dutch organization charged with looking into financial offenses.
The guy is suspected of helping illegal financial transactions and money laundering through the decentralized Ethereum mixer Tornado Cash, according to the authority.
The Financial Advanced Cyber Team (FACT) of the FIOD announced that it does not exclude making more than one arrest in this matter, noting that a criminal investigation into Tornado Cash was started in June 2022.
The FACT claims that Tornado Cash has been used to hide significant illegal cash flows, including scams and hacks involving cryptocurrency.
These included money that was purportedly taken by a North Korean-related gang through hacking. According to FACT, Tornado Cash began operations in 2019 and has already generated at least $7 billion in revenue, the release states.
The announcement follows the US Treasury Department’s listing of hundreds of Tornado Cash addresses on August 8 on the OFAC’s list of countries subject to sanctions. Following that, 75,000 USD Coins (USDC) connected to addresses that were sanctioned by OFAC were frozen by major cryptocurrency companies and USD Coin issuer Circle.
Sanctions made it forbidden for Americans and their organizations to communicate with Tornado Cash’s smart contract addresses. Willful disobedience is punishable by fines of $50,000 to $10,000,000 and jail terms of 10 to 30 years.
By obscuring information trails on the blockchain, Tornado Cash, an Ethereum-based service, enables users to secure their anonymity during cryptographic transactions.
Vitalik Buterin, a co-founder of Ethereum, asserted that he gave money to Ukraine via Tornado Cash in order to protect the recipients’ financial anonymity.
