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Crime Privacy

Suspected Developer of Crypto Mixer Tornado Cash Arrested (techcrunch.com) 37

Posted by msmash from the how-about-that dept.
The Dutch government agency responsible for investigating financial crimes said it has arrested an individual suspected of being a developer of the U.S.-sanctioned crypto mixing service Tornado Cash in a move that has rattled some crypto and privacy advocates. From a report: The Fiscal Information and Investigation Service said Friday that the arrested 29-year-old man is suspected to be involved in "concealing criminal financial flows and facilitating money laundering" through the popular crypto mixing service. "Multiple arrests are not ruled out," it said. The agency added that it arrested the individual in Amsterdam. The move comes days after the U.S. government sanctioned Tornado Cash -- a service that allows users to mask their transactions by jumbling funds from different sources before sending them to the ultimate destination -- for its role in enabling billions of dollars' worth of cryptocurrency to be laundered through its platform.
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Suspected Developer of Crypto Mixer Tornado Cash Arrested More

Suspected Developer of Crypto Mixer Tornado Cash Arrested

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  • Shocked (Score:4, Funny)

    by guygo ( 894298 ) on Friday August 12, 2022 @10:25AM (#62783710)

    Someone was "concealing criminal financial flows and facilitating money laundering" through crypto?
    I'm shocked... shocked I say!

  • "in a move that has rattled some crypto and privacy advocates"

    They ain't seen nothin' yet.

  • Cue Bruce Springsteen, play the song "Glory Days" [youtube.com] in remembrance of when crypto currency was the new thing... now its well expect massive regulation, tax rules, etc.

    JoshK.

    • Re: (Score:1, Informative)

      by Train0987 ( 1059246 )

      Facilitating money laundering is already illegal. No new laws are really needed, the crypto world will be shut down and dozens if not hundred of people will be prosecuted by existing regulations and tax rules.

      • Indeed. My point was the end of an era, the "wild west" of a new market, where anyone buying could then profit...As for new laws, regulation, that's beyond my point...

        JoshK.

    • Re: (Score:1)

      by splutty ( 43475 )

      There appears to be a shared delusion in crypto circles that the law doesn't apply to them, because crypto isn't specifically mentioned in the law, so it obviously can't apply to them.

      Some of these people are quite intelligent, but so incredibly stupid at the same time.

      • The handful of intelligent ones know exactly what they're doing: stealing as much from as many of the stupid ones as possible.

      • Indeed. Many have the attitude that anonymity in crypto-currency means the law and consequences don't apply. The halcyon days of crypto-currency are over with the imploding market, and that governments are now interested. Travesty when the delusion turns into IRS or FBI agents showing up to arrest someone on charges of wire-fraud and money laundering. I never bought into the crypto-currency fad (or fraud?) as a unregulated Ponzi scheme.

        JoshK.

  • Cuz they can trace it. Soon as they can't trace it any more they got to do somethin about it, cuz they gotta know exactly what you're doing with your own money. Don't matter if what you're doing is perfectly legal, they get nervous if they can't trace it.

    If the gummint treated guns like crypto, this would be a far safer country. Just sayin

    • Re:Gummint don't mind crypto (Score:4, Interesting)

      by gtall ( 79522 ) on Friday August 12, 2022 @01:12PM (#62784268)

      You are full of shit, just saying. Tracking money matters a lot. It allowed the "gummint" to take out much of the mob. It allows the "gummint" to keep an eye on shady organizations such as the right wingnuts with guns.

      Guns are what is helping to destroy the U.S.. Don't believe me, look at

            https://www.npr.org/sections/g... [npr.org]

      Notice how the U.S. is "tired of winning"? And before you go all conspiracy nutso, look at

      https://www.cdc.gov/nchs/press... [cdc.gov]

      Mississippi, Louisiana, Alabama, Missouri and Arkansas have the highest homicide rates. Them nice red, God-fearing, "real people" are whacking each other with wild abandon.

      • Jackson MS, New Orleans, Baton Rouge, Birmingham, Montgomery and Little Rock don't have many Republicans. Remove those six cities from your deceptive stats and then tell us where those five states would rank?

        The US wouldn't even exist if the people living here at the time weren't all gun owners.

        • The US wouldn't even exist if the people living here at the time weren't all gun owners

          Counterpoint: Maybe if there had been fewer gun owners, the white Europeans wouldn't have slaughtered and forcibly removed the indigenous people in order to steal their land. The US would most likely still exist, but its history would include a lot less bloodshed (around 56 million indigenous people were killed) and fewer attempts at genocide.

  • This is the sort of nuke-it-from-orbit reaction law enforcement had to sketchy international money transfer services back in the good ol' days, before the cryptocurrency era of derpy laissez-faire ineptitude!

  • money laundering = FPMITAP time

  • Dutch and EU regulators' view differs from US one (Score:5, Informative)

    by JaredOfEuropa ( 526365 ) on Friday August 12, 2022 @10:51AM (#62783792) Journal
    In cases of a service that has both legitimate and illicit uses, EU regulators are a bit quicker to shut the thing down if its used predominantly for illicit stuff. There are two reasons one might run their coins through a mixer: you want to hide your transactions from other people (privacy), or you want to hide them from the government (money laundering, black market purchases). In the EU, at least with the legislators, the view is very much that fighting illicit use trumps the right to privacy.

    Especially in the monetary domain, there currently is an extreme focus on fighting money laundering, which means individuals and companies having to provide all manner of information to official organisations. In regular commerce, NL is going to outlaw (yes you read that right) cash transactions of over €3000. Large cash withdrawals of over €2000 are already all but impossible. And banks have been given a duty to keep an eye out for suspicious activity, which means that one the one hand your business account may be frozen because a client in Cyprus sent you €5000 (happened to someone I know), the bank may call you to clarify certain transactions. In that light, I am not at all surprised that they rules this mixer service to be a criminal enterprise.

    • A big reason why we have countries, is the fact that they want to govern their areas differently than the others.

  • This is big news (Score:4, Interesting)

    by rsilvergun ( 571051 ) on Friday August 12, 2022 @11:26AM (#62783896)
    I've said it before and I'll keep saying it until this fad is over, crypto can't survive even minimal regulation.

    Right now crypto bros are desperately trying to get a bill through Congress that would classify them as a commodity so that the much weaker CFTC will oversea their shenanigans. It's not working. They've got a few of the more corrupt senators to propose it, but it's not going to go anywhere in the mess that is our Congress.

    That leaves them (correctly) being regulated as a security by the SEC. A very high risk security with absolutely nothing tangible backing it.

    And now the Justice Department is (finally) getting around to going after the money launderers. Crypto is actually terrible for money laundering. All you need to do to catch somebody is give them a few coins to launder and watch where it goes. It's a freakin' distributed leger for Christ's sake.

    But it takes a long time for cops to catch up to new tricks. Now they have. That's going to drastically reduce the amount of trading and thereby the value.

    Assuming they can't get our political system to function long enough to pass laws to keep the DOJ off their backs and let them go back to money laundering and illegal securities trading the crypto industry will crash down to the price it was before drugs, ransomeware and money laundering kicked in. Around $10 bucks a bitcoin. Not $10k. $10.00 USD. That's where the "bros" had the price until the criminals got involved.

    Heck, leave the crooks and just leave the illegal securities trading and it drops to $10k. And miners can't make money at that point. The entire system goes into a deflationary death spiral.

    • I always thought cryptocurrencies were a LEO's wet dream, because you don't need a warrant to monitor it (no expectation of privacy on a distributed ledger), and the crooks can't hide it/delete it/shred it, because it's immutable, and there will always be a copy of the transactions somewhere.

      I'm not sure why anyone other than the stupidest of crooks would use it for money laundering. TPB can take their sweet time combing over every single transaction until they find a set that implicates the suspect. T

      • Yeah, mixing seems like it helps when you're hiding from Barney Fife, but when somebody serious investigates, it means they potentialli get more birds per stone.

    • Re: (Score:2)

      by mjwx ( 966435 )

      I've said it before and I'll keep saying it until this fad is over, crypto can't survive even minimal regulation.

      The problem and benefit of regulation is that it takes so long to get into place. This means we can't effectively regulate rapidly changing situations but it also means that when we do regulate something we (at least) have time to get it right.

      That being said, I largely agree with you with one minor change, Crypto wont even survive until minimal regulation. It was a scam and ponzi scheme from the word go, it'll collapse and fall in a heap as soon as they start running out of suckers.

  • So he created a way to hide transaction history from the blockchain. I understand it is mainly used for money laundering but which law did he break? Does the law need to be updated before suing him(and only if he continues to run the service)? BTC is not money, does it make a difference?
    • Next, they're going to go after the people who invented public key cryptography, oh, and the originator of the hash function.

      Conspiracy to enable hiding nefarious activity from the government's legitimate oversight for all of our safety.

    • So he created a way to hide transaction history from the blockchain. I understand it is mainly used for money laundering but which law did he break? Does the law need to be updated before suing him(and only if he continues to run the service)?

      Money laundering

      BTC is not money, does it make a difference?

      No

  • /Roe v. Wade/ (Score:1, Offtopic)

    by bill_mcgonigle ( 4333 ) *

    I like how half the country thinks that the 4th Amendment guarantees a right to abortion through the idea of privacy, but when it literally says that you have a right to be private in your affairs and papers, they don't think that buying things falls into that, even though every human ever in a civilization has needed to do that.

    Like, if I go buy a notebook, the government really needs to keep tabs on that or the society would crumble. Speaking of which, a decent engineering notebook now costs $32! Holy s

    • Gawd you're a liar.

      I guess you learned what the Demonrat Libraals believe in by watching... right wing television.

    • Re: (Score:2)

      by xalqor ( 6762950 )

      The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

      Hmm, doesn't mention anything about the right to commit crimes and launder the money to make it harder for investigators to prove it. Also doesn't mention anything about privacy,

    • Well if abortion is not a private affair, nothing is.
      BTW, Antiabortion is illegal under due process and the right against enslavement

  • Looks like crypto market crash was based on two important events:
      1) mixing service developers arrested for money laundering
      2) illegal money no longer flowing to the crypto markets

    So there you have it. Crypto markets are no longer benefiting from the illegal money coming from criminals.

  • These "tumbler" services are used almost exclusively by criminals. I bet the legitimate users of the service barely register as background noise. So it's no surprise to learn the cops would want to arrest the people operating them and profiting from criminal activity.

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