Crypto 'Laundering' Service Developer Arrested in Europe, Authorities May Still Be On The Hunt For Others Involved With Tornado Cash

A 29-year-old man was detained by Dutch officials in Amsterdam on suspicion of aiding in the concealment of illicit financial flows and the facilitation of money laundering through the cryptocurrency service Tornado Cash.

What Happened: One of the service's developers, Alexey Pertsev, was arrested on Aug. 10, according to a statement released on Friday by the Dutch Fiscal Information and Investigating Service (FIOD). Police have not ruled out the potential of multiple arrests. 

Read more: Vitalik Buterin 'Outs Himself' As Using Tornado Cash For This Purpose

Pertsev will be held in custody for at least 14 days, a FIOD spokesperson told Coindesk.

The action follows the U.S. government sanctioning Tornado Cash for its role in enabling billions of dollars worth of cryptocurrency to be laundered through its platform.

Tornado Cash is a service that allows users to cloak their transactions by jumbling funds from different sources before sending them to its ultimate destination. It has been used to launder more than $7 billion worth of virtual currency since it was created in 2019, the U.S. Department of the Treasury said.

According to the Office of Foreign Assets Control (OFAC), the total sum laundered through the company included $455 million, which was allegedly stolen by Lazarus Group, a North Korean-backed hacker band. Then there was $96 million from the Harmony Bridge attack in June and about $8 million from the Nomad attack last week.

Check this out: Vitalik Buterin Proposes 'Low-Tech' Approach To Boost Privacy With NFT Transactions

Why It Matters: The Dutch agency's action has drawn criticism from crypto and privacy advocates who claim that mainstream payment systems have been used for money laundering, too.

Both the Tornado Cash website and its Discord server are unavailable.

“Due to the recent blacklisting of our website by the Treasury Department of the United States. Most people will experience difficulties in accessing our website because it has been taken down and all access has been shut,” the company delivered via Telegram.

Photo: Proxima Studio via Shutterstock