A 29-year-old man was detained in Amsterdam on Friday, per the Dutch tax authorities investigative department, who suspects him of working as a developer for Tornado Cash, a cryptocurrency mixing business that the US had earlier in the week sanctioned.
The Dutch agency's action further demonstrates the increasing interest that governments are showing in so-called crypto mixers. Another cryptocurrency mixing service, Blender, received approval from the Office of Foreign Asset Control earlier this year.
The Block identified the Tornado Cash engineer as Alexey Pertsev despite FIOD concealing his name. Tornado Cash, as per FIOD, "has been utilized to mask large-scale criminal money flows, particularly from data thefts of cryptocurrencies so-called crypto hacks and scams," the organization claimed.
The platform works by pooling and scrambling different digital assets from thousands of addresses, including money that might have been obtained illegally as well as money that might have been obtained legally, to hide the trail back to the asset's original source, giving criminals a chance to hide the source of the stolen money.
After the U.S. sanction, a variety of companies have banned or deleted accounts connected to Tornado Cash, including GitHub, Circle, Alchemy, and Infura.
On the news, the Tornado Cash token TORN fell from $16.5 to $13.7, furthering this month's fall. According to CoinMarketCap, the token's decline during the past seven days has exceeded 50%.
The latest findings point to the greater attention of bitcoin mixing services for what is believed to be a means of paying out illicitly obtained cryptocurrency.
This includes the indebted North Korean government, which is known to rely on cyberattacks on the cryptocurrency industry to steal virtual money and circumvent trade and economic sanctions placed on the country.
