Tornado Cash Developer Arrested in Amsterdam

Update (11:30 a.m., ET): The arrested developer's name is Alexey Pertsev.

A developer behind the Tornado Cash protocol has been arrested in Amsterdam, according to a release from the Fiscal Information and Investigation Service (FIOD) this morning. According to the FIOD statement, the suspect is accused of having "involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralized Ethereum mixing service Tornado Cash."

Tornado Cash is the "cryptocurrency mixing" service that was sanctioned by the U.S. Treasury on August 8. The Treasury cited the role the service plays in helping criminals launder funds as the reason for its sanctioned status. Specifically, U.S. Secretary of State Anthony Blinken has accused the service of assisting hacking groups that are state-sponsored by the Democratic People's Republic of Korea, a U.S.-sanctioned entity.

According to CoinDesk's report, the developer will appear in court this morning in the Netherlands. The report further states that an investigation has been underway since June and that further arrests in the case are possible. Tornado Cash was founded in 2019 by developer Roman Semenov, though it is unclear at the time of writing whether Semenov is the suspect in the Dutch case.

Semenov's latest tweet from August 8 reads, "My GitHub account was just suspended. Is writing an open source code illegal now?" and several prominent industry figures have expressed concern over today's news, including @Cobie, who tweeted, "Welcome to the war on code." The Tornado Cash case will have wide-ranging implications on the cryptocurrency ecosystem as the roles within the industry of decentralization, privacy, and open source code come up for debate.