A 29-year-old man suspected of having laundered money with cryptocurrencies as a developer of the cryptocurrency service “Tornado Cash” was arrested in the Netherlands on Friday. This is reported by the Reuters news agency, citing information from Dutch authorities. The United States had already imposed sanctions on the platform on Monday because it is said to have supported a North Korean hacker group.
According to the report, the man was arrested in Amsterdam on Wednesday. Criminal investigators from the Dutch financial investigation authority FIOD did not provide any information about the identity of the developer, but they held out the prospect of further arrests. According to the FIOD, it had been investigating the platform since June 2022 because it suspected that billions of dollars in illegal financial flows had been processed via it.
US imposes sanctions on Tornado Cash
The United States imposed sanctions on Tornado Cash on Monday. The service is accused of, among other things, helping hackers from North Korea launder the proceeds of cybercriminal activities.
Since its inception in 2019, Tornado Cash is said to have laundered more than $7 billion worth of stolen cryptocurrency, according to a senior U.S. Treasury Department official. The Reuters news agency was the first to report back then. Monday’s move froze all of the Monetary Service’s U.S. assets.
Lazarus Group launders funds with Tornado Cash
According to the US government, the Lazarus Group alone, a well-known hacking group backed by the North Korean government, laundered at least $455 million through Tornado Cash. The hacker group is already subject to US sanctions. According to US law enforcement agencies, she is behind the internationally acclaimed Sony Pictures and WannaCry hacks. The FBI has put several suspected members out for investigation. The theft of almost one billion US dollars from Bangladesh’s central bank, which is also allegedly controlled by the Lazarus Group, was only prevented by coincidence. In 2021 alone, North Korean hackers are said to have stolen nearly $400 million in cryptocurrency. The United States and South Korea have been claiming for years that North Korea is using the stolen money to finance its missile program, among other things. Pyongyang denies these allegations.
The criminal hackers also have numerous business models in the crypto industry in their sights, for example they stole digital currency from the cash register of the game “Axie Infinity” worth around 600 million dollars at the time. That’s what players should be paid for.
Tornado Cash, in turn, is accused of helping cybercriminals like the Lazarus Group by hiding transaction details and failing to implement meaningful anti-money laundering safeguards. Despite previous calls for Tornado Cash to make changes, criminal activity continued, the US Treasury Department official quoted by Reuters said. The sanction decision was then made.
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