Authorities in the Netherlands have arrested the developer of Tornado Cash, a crypto hybrid service, on suspicion of money laundering.
The Fiscal Information and Investigation Service (FIOD), the agency responsible for investigating financial crimes in the Netherlands, officially announced the arrest of a 29-year-old man in Amsterdam on Friday.
The individual was involved in facilitating the flow of criminal money and money laundering through the decentralized Ethereum mixer Tornado Cash, the official said.
While the FIOD has indicated that it will not make many arrests in the case, the Financial Advanced Cyber Team (FACT) has indicated that a criminal investigation into Tornado Cash will begin in June 2022.
According to the facility, Tornado Cash was allegedly used to hide large-scale criminal money laundering, including crypto-hacking and fraud.
“These include money stolen by a group believed to be linked to North Korea. Tornado Cash was launched in 2019 and has reportedly generated at least $7 billion in revenue since then,” the announcement said.
The news comes after the US Treasury Department placed dozens of Tornado Cash addresses on the Office of Foreign Assets Control (OFAC) sanctions list on August 8. USDC is connected to OFAC-licensed addresses.
As a result of the ban, it became illegal for any US person or entity to interact with Tornado Cash’s modern contract addresses. Penalties for willful noncompliance can range from $50,000 to $10,000,000 and 10 to 30 years in prison.
Related: The co-founder of Tornado Cash reported that the industry was launched from GitHub in response to the fine
Based on Ethereum, Tornado Cash is a tool that allows users to hide their crypto transactions to protect their identity by forging information trails on the blockchain. Ethereum founder Vitalik Buterin used Tornado Cash to donate money to Ukraine to protect the financial privacy of recipients.