Tornado Cash’s Creator Is Detained In The Netherlands

August 12, 2022 - Around 3 mins mins to read

A creator of Tornado Cash, the Ethereum trading mixer site that the US earlier this week outlawed, is allegedly in custody, according to Dutch officials.

Tornado Cash's Creator Is Detained In The Netherlands — TC’s Creator Is Detained In The Netherlands

A 29-year-old man living in the Dutch metropolis of Amsterdam was detained on August 10 on suspicion of working with Tornado Cash, according to a notification published on the afternoon of August 12.

The FIOD also disclosed that it has been looking into Tornado Cash since June 2022 on the grounds that it may be helping to launder money using cryptocurrency. Similar to the US, Dutch police reported that since its launch in 2019, hacker groups with ties to North Korea have used Tornado Cash to launder up to USD 7 billion in illicit funds.

The FIOD statement did not identify the person detained but indicated that the inquiry was still ongoing. The FIOD asserts that the Tornado Cash operators have profited significantly from money-laundering transactions and does not rule out additional arrests.

Arrest of suspected developer of Tornado Cash – FIOD https://t.co/7sO2q7NhJc
— banteg (@bantg) August 12, 2022

According to a source from banteg, a well-known figure in the DeFi community, the aforementioned developer is Alex Pertsev, a Russian citizen. However, this information is difficult to verify because most of the Tornado Cash development team is anonymous, except for founder Roman Semenov.

questions:

– what happens to all TC devs?
– what happens to TC DAO members?
– what happens to those who have used TC pre-sanctions?
– what happens to those who used it post-sanctions?
– what happens to devs for any similar projects?

getting real serious now
— Tim Copeland (@Timccopeland) August 12, 2022

“What happens next to Tornado Cash developers, DAO members, people who used Tornado Cash before the ban, those who used it after the ban, and developers of similar projects ?”

Tornado Cash was included on a sanctions

Tornado Cash was included on a sanctions list earlier this week by the US as a result of helping the Lazarus Group, a North Korean cyber group that attacked Axie Infinity and many other targets, and other bad actors, transfer their funds. significant crypto industry hack. Although the project’s Wesbite and Github website are no longer available, its smart contract is still usable by cryptocurrency users.

In order to reduce legal concerns, many significant crypto projects, including Circle (issuer of USDC stablecoin), RPC providers Infura and Alchemy, dYdX exchange, Oasis.app wallet, etc., have blacklisted wallet addresses that have interacted.

Here's the list of Tornado Cash resources that were banned

– Tornado Cash @GitHub organization
– personal @GitHub accounts of TC contributors
– all $USDC on Tornado Cash contracts @circlepay
– @infura_io RPC
– @AlchemyPlatform RPC
– https://t.co/SHvgEjTOMV domain @eth_limo
— ????️ Tornado.cash ????️ (@TornadoCash) August 9, 2022

Even the USDC in Tornado Cash’s wallet was frozen by Circle, igniting debate over centralization. To reduce the possibility of cash freezing, Maker’s stablecoin project DAI is thinking of eliminating USDC from the list of collateral assets.

Users of the trading “mixer” platform Tornado Cash can fund their accounts with ETH or other ERC-20 tokens that are accepted. In order to increase anonymity, the initiative will mix this ETH before sending it back to the user, effectively deleting virtually all evidence of the funds’ previous transactions. This project is open source and entirely decentralized, however it is prohibited by law simply because it is misused.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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