Dutch Authority says arrested Tornado Cash developer suspected of involvement in financial crimes

Please fol­low and like us:
Pin Share

The Fis­cal Infor­ma­tion and Inves­ti­ga­tion Ser­vice (FIOD) has con­firmed that the arrest­ed Tor­na­do Cash devel­op­er was sus­pect­ed of being involved in the hid­ing of crim­i­nal finan­cial trans­ac­tions and facil­i­tat­ing mon­ey laundering.

On Aug. 12, Alex­ey Pert­sev was arrest­ed in the Nether­lands in con­nec­tion to Tor­na­do Cash. A non-prof­it pol­i­cy advo­ca­cy group, DeFi Fund Edu­ca­tion reached out to the author­i­ty to con­firm the basis for the arrest.

In response, the FIOD stat­ed that the devel­op­er was arrest­ed for his involve­ment in facil­i­tat­ing mon­ey laun­der­ing through the Tor­na­do Cash protocol.

The agency not­ed that its inves­ti­ga­tion against the devel­op­er was inde­pen­dent of the US sanc­tion. It how­ev­er refused to name the arrest­ed developer.

The Block had report­ed Aug. 12 that the arrest­ed Tor­na­do Cash devel­op­er was Alex­ey Pert­sev, accord­ing to his wife Kse­nia Malik.

Tornado Cash on the run

FIOD’s arrest of the devel­op­er and the US sanc­tion has left the Tor­na­do Cash ecosys­tem in disarray.

Pres­sure from the sanc­tion forced the DAO to shut down oper­a­tions on Aug. 13.

In an exclu­sive report with Cryp­toSlate, a com­mu­ni­ty mem­ber con­firmed that the mul­ti-sig was delet­ed after DAO funds were moved to the gov­er­nance con­tracts. Com­ment­ing on why the pro­to­col had to take the route, the Tor­na­do Cash mem­ber stated:

“To keep mem­bers safe and avoid legal issues” as the sit­u­a­tion is “dan­ger­ous for all devs,” even those out­side the Tor­na­do Cash ecosystem.

No going back for the US Treasury

The US Trea­sury had ear­li­er stat­ed it would pur­sue after all cryp­to mix­ing pro­to­cols with no Know Your Cus­tomer (KYC) modal­i­ties. Cryp­to mix­ing pro­to­cols by design are decen­tral­ized, mak­ing it dif­fi­cult to imple­ment a KYC model.

The US Trea­sury believes that unreg­u­lat­ed mix­ers in the cryp­to indus­try will under­mine the nation­al secu­ri­ty of the U.S. and is aggres­sive­ly sanc­tion­ing pro­to­cols sus­pect­ed of facil­i­tat­ing illic­it funds.

“[The] Trea­sury will con­tin­ue to inves­ti­gate the use of mix­ers for illic­it pur­pos­es and use its author­i­ties to respond to illic­it financ­ing risks in the vir­tu­al cur­ren­cy ecosystem.”



Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *