Tornado Cash started to face issues with regulatory agencies when the Treasure Department of the USA abruptly banned the project recently. Following the unexpected development, the Fiscal Information and Investigation Service of the Netherlands also come into action. The European regulatory agency recently confirmed the arrest of a 29-year-old developer who is thought to be connected with Tornado Cash. The news has been making rounds on social media.
The confirmation of the report was provided by the Dutch law enforcement agencies on Friday. According to the details, the alleged perpetrator was spotted and arrested in Amsterdam on 10th August. Tornado Cash is a mixing service for digital assets that allow the users to remove the trail of transactions and covert their cryptocurrencies in a manner that leaves no traces behind. Thus far, the identity of the arrested suspect is kept a secret.
The latest statement issued by FIOD reads that the alleged suspect is under investigation for concealment of sensitive financial data related to criminal sources and facilitation of money laundering. The report also claimed that Tornado Cash is an illegal mixing service that operates on the Ethereum blockchain. The suspect is under detainment for assisting in covering up financial cash flows that are connected to criminal entities.
The Cyber investigation team of FIOD has been keeping tabs on Tornado Cash since June 2022. The law enforcement agency has claimed that the seizure can also lead to multiple arrests. It is worth noting that Tornado Cash is one of the most popular mixers on the Ethereum network that warrants privacy for its users. Since it is not possible to keep any transaction trial private on a public blockchain like Ethereum, therefore users take advantage of TC to protect their data.
US Treasury Department to Take Action Against Tornado Cash
The first crackdown on Tornado Crash was initiated by the Foreign Asset Control Office of the US Treasury Department. Following the intervention, the operations of Tornado Cash were halted with immediate effect for an undisclosed period. Thousands of TC users who have transactions underway and those who are regular mixers have come forward to protest against the unwarranted action of the government agencies.
The officials at the Treasury Department have also claimed that TC has been enabling money laundering and participating in other financial crimes. Meanwhile, the cryptocurrency proponents have come together to show their opposition and objection to government involvement. Platforms like Circle, Alchemy, GitHub, Infura, and dYdX have also thus far followed the banning directions from the US Treasury that have sparked a debate about the reliability of DeFi.
