Authorities in the Netherlands arrested a suspected developer of crypto mixing service Tornado Cash, mere days after the U.S. Treasury imposed sanctions on the company. The arrest was confirmed in a statement from the Dutch Fiscal Information and Investigation Service (FIOD).
The FIOD arrested an unidentified 29-year-old man in Amsterdam suspected of involvement in concealing criminal financial flows and facilitating money laundering through the mixing service Tornado Cash. Tornado Cash allows users to obscure blockchain-based transactions and according to a senior Treasury official, has successfully laundered more than $7 billion in virtual currency since it was created in 2019. By mixing cryptocurrencies, the service makes it possible to conceal the origin and destination of digital payments, thereby increasing their anonymity. It has been said that the North Korean government-backed hacking group, the Lazarus Group, has laundered at least $455 million through Tornado Cash. According to the undersecretary of the Treasury for terrorism and financial intelligence, Brian E. Nelson,
Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States. Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks. Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.
The FIOD stated,
These advanced technologies, such as decentralised organisations that may facilitate money laundering are receiving extra attention from the FIOD.
The FIOD added that it may make further arrests in the case. According to the statement released by the agency, its Financial Advanced Cyber Team division started criminal investigations into Tornado Cash in June. It found that the service “had been used to conceal large-scale criminal money flows, including from (online) thefts of cryptocurrencies (so-called hacks and scams.)”
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