Developers with suspected links to Tornado Cash caught in NL • The Register

Dutch authorities have arrested a software developer suspected of working with Tornado Cash, a cryptocurrency mixing service that was just two days earlier sanctioned by the US government for allegedly laundering money for ransomware operators and other cybercriminals.

The 29-year-old man is accused of being involved in the operations of the decentralized Ethereum mixing service, including “obfuscating criminal financial flows and facilitating money laundering through cryptocurrency mixing,” officials at the Netherlands Tax Information and Investigation Service (FIOD) wrote. in one expression.

Further information on this topic has not been published.

in the leveling of sanctions On August 8, the US Treasury announced that Tornado Cash was used to launder hundreds of millions of dollars stolen from such threat groups as the Lazarus Group, a high-profile North Korean-sponsored ransomware gang.

The US government has put a focus on crypto mixers – aka “tumblers” – which it describes as a national security threat, stating that they propagate ransomware attacks by giving cybercriminals a place to store their stolen cryptocurrencies Hide and launder assets, and another way to improve their anonymity.

The move against Tornado Cash comes three months after similar sanctions were imposed on another crypto mixer. The sanctions freeze the assets of both mixed services and prohibit US citizens and businesses from doing business with either store without written approval from the US government.

Other countries, including the Netherlands, are also targeting such services.

“These advanced technologies, such as decentralized organizations that could facilitate money laundering, receive special attention from the FIOD,” the Dutch agency said in its statement. “Even in the cryptocurrency space, the FIOD stands for a secure financial Netherlands and investigates with impact and impact.”

The agency added that “multiple arrests are not ruled out”.

Crypto mixers take digital assets from multiple transactions and mix them together, essentially obfuscating their origin and destination. After mixing these assets, the services then send them to the recipients. Tornado Cash, which resides on the Ethereum blockchain, processes all transactions anonymously, according to the US Treasury Department, allowing cryptocurrency stolen by threat groups to be mixed with legitimate digital assets, making them more difficult to trace.

Ransomware and other extortion schemes existed before the rise of cryptocurrency, but crypto is among the drivers of the escalating use of malware. in one report [PDF] Earlier this year, the US Treasury Department wrote that ransomware groups often target larger companies in search of a bigger ransom payment, and that services like Tornado Cash and Blender help launder all that money.

“To further obfuscate the laundering of ransomware proceeds, threat actors avoid using the same wallet addresses and use chain hopping, mixing services, and decentralized exchanges,” the report’s authors wrote.

Tornado Cash has allegedly laundered more than $455 million stolen from Lazarus, including more than $96 million in digital assets taken from blockchain startup Harmony’s Horizon Bridge service in June.

It was also allegedly used to launder money in high-profile attacks earlier this year against organizations such as Beanstalk Farms, a decentralized finance platform, decentralized autonomous organization Inverse Finance, and Nomad, another cryptocurrency bridge.

FOID officials said the agency’s Financial Advanced Cyber ​​Team (FACT) launched a criminal investigation into Tornado Cash in June, saying the merging service “was used to conceal large-scale criminal cash flows, including from (online )Thefts of cryptocurrencies (so-called crypto hacks and fraud). This included funds stolen through hacks from a group believed to be linked to North Korea.”

Investigating money laundering is a priority for the Dutch government, the statement said.

“By concealing the criminal origin of the proceeds of a crime, criminals can stay out of the reach of investigative authorities and enjoy their criminal proceeds undisturbed,” they said, adding that money laundering operations such as crypto-mixers “are a new phenomenon operated by the FIOD expressly observed.” ® Developers with suspected links to Tornado Cash caught in NL • The Register

Laura Coffey

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