29-year-old man in Amsterdam arrested due to his claimed involvement in the development of Tornado Cash

Tornado Cash, a cryptocurrency “mixer” that the US Department of the Treasury outlawed earlier this month as a result of its use in the money-laundering of significant hacking operations, particularly those linked to state-sponsored North Korean cybergangs, has been linked to the detention of a 29-year-old man in Amsterdam.

The Netherlands’ Fiscal Information and Investigation Service (FIOD) announced the arrest. The person is “suspected of collaborating in masking criminal financial flows and helping money laundering,” according to FIOD, and “additional arrests are not ruled out” while inquiries into Tornado Cash are underway. Today, the suspect will be displayed to a fact-finding judge. Authorities are concerned that bitcoin mixing services are not doing enough to prevent money laundering.

The arrest in Amsterdam is a manifestation of a global trend in which governments use coercion to pursue cryptocurrency mixers like Tornado Cash. By collecting money from numerous consumers and then dispersing it, these businesses make it more difficult for authorities to follow the digital trails created by bitcoin transactions.

Organizations and firms like the US Department of the Treasury (DOT) and others claim that these businesses have forgotten their role as a conduit for unlawful money laundering. Earlier this year, the DOT added Blender.io to its list of prohibited websites after it was discovered that North Korean hacker groups also utilized it. In response, proponents of cryptocurrencies claimed that crypto mixers accomplish a crucial goal by enhancing transaction confidentiality.

For instance, the cryptocurrency advocacy group Coin Center claimed that the US government was mistakenly focusing on “a tool that is neutral in nature and that can be exploited to good or evil objectives like any other technology” in response to US sanctions against Tornado Cash.

In a blog post, Jerry Brito and Peter Van Valkenburgh of Coin Center stated that “it is not any one bad actor who is being sanctioned, but rather it is all Americans who may choose to employ this automated method in order to safeguard their own anonymity.”

One Twitter user mentioned financial transactions, including hiding payments to Ukraine from the government, that may put both sides in danger if they became public. Vitalik Buterin, a co-founder of Ethereum, responded that he had used Tornado Cash “to gift for this exact reason.”