FIOD issues ‘worrying’ statement after crypto mixer arrest

About a week ago, the crypto news came out that a developer of the crypto mixer Tornado Cash has been arrested. The Fiscal Intelligence and Investigation Service (FIOD) arrested the developer in Amsterdam and gave more information about the arrest yesterday.

‘Crypto mixing software is illegal’

The FIOD provided the information in response to a request from the non-profit organization DeFi Education Fund. The organization calls the FIOD statement “worrying,” as can be read in the tweet in which the FIOD statement is shared. The FIOD declares:

“About the concerns, developing a tool is not prohibited, but if a tool is made for the sole purpose of committing criminal offences, for example to disguise criminal money flows, then putting a developed tool online/making available be punishable.”

DeFi Education Fund calls the statement worrisome because Tornado Cash did not aim to conceal criminal money flows. The crypto mixer, with which one can erase traces of transactions, is said to improve the privacy of crypto users. However, this naturally also attracted criminals who were able to stay under the radar thanks to Tornado Cash.

It is not certain whether the FIOD believes that Tornado Cash’s sole purpose was to conceal criminal money flows.

Ban on crypto mixers ignites debate

Tornado Cash was blacklisted by authorities in the United States early this month. Since then, some interaction with the tool illegally.

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The move by the US is fueling a wide discussion within crypto. While the mixer has proven to be widely used by criminals, privacy and the freedom to develop software are central to this discussion. The CEO of crypto exchange Kraken himself believes that the ban is against the US Constitution.

In July, blockchain researcher Chainalysis reported that as much as 23% of assets passed through Tornado Cash came from criminal entities. This includes the North Korean hacker group Lazarus, which is known for its large-scale exchange hacks.

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