The Fiscal Information and Research Service (FIOD) Confirmed The arrested Tornado Cash developer is suspected of involvement in concealing criminal financial transactions and facilitating money laundering.
On August 12th, Alexey Pertsev was arrested in the Netherlands in connection with Tornado Cash. His DeFi Fund Education, a nonprofit policy advocacy group, contacted authorities to confirm the basis for his arrest.
In response, FIOD said the developer was arrested for being involved in facilitating money laundering via the Tornado Cash protocol.
FIOD has followed up with more information about the Tornado Cash developer who was arrested last week.
— Sam Canavos (@sccanavos) August 16, 2022
The agency said the investigation into the developer was unrelated to US sanctions.
had a block report According to his wife Ksenia Malik, it was revealed on August 12 that the arrested Tornado Cash developer was Alexey Pertsev.
Tornado cache in action
The Tornado Cash ecosystem is in turmoil following the arrest of developers by FIOD and US sanctions.
Sanctions pressure forced the DAO to cease operations on August 13.
In an exclusive report with CryptoSlate, a community member confirmed that multisig was removed after DAO funds were moved to a governance contract. As to why the protocol had to go that route, a member of Tornado Cash said:
Due to the situation being “dangerous for all developers”, including developers outside the Tornado Cash ecosystem “to keep our members safe and avoid legal issues”.
Never going back to the US Treasury
The U.S. Treasury previously said it would pursue all crypto-mixed protocols without a Know Your Customer (KYC) modality. Crypto-mixing protocols are decentralized by design, making the KYC model difficult to implement.
The U.S. Treasury Department believes unregulated mixers in the cryptocurrency industry undermine U.S. national security and is aggressively sanctioning protocols suspected of facilitating illicit funds.
“[The] The Treasury Department will continue to investigate the use of mixers for illegal purposes and will use its authority to address the risks of illicit funding in the cryptocurrency ecosystem. ”