Dutch Detain Suspected Developer of Crypto Mixer Tornado Cash

AMSTERDAM—Dutch authorities on Friday said they had arrested a 29-year-old man believed to be a developer for the crypto mixing service Tornado Cash, which the United States put on its sanctions list this week.The U.S. sanctions announced on Monday followed allegations that Tornado Cash was helping conceal billions in capital flows, including for North Korean hackers.
By mixing cryptocurrencies, the online service makes it possible to conceal the origin or destination of digital payments, increasing their anonymity.
Tornado Cash is one of the largest crypto blenders identified as problematic by the U.S. Treasury.
The Dutch public prosecutor’s office for serious fraud, environmental crime, and asset confiscation (FIOD) said Tornado was suspected of having laundered more than $7 billion worth of virtual currency since it was created in 2019.
Tornado Cash did not reply to a request for comment.
The FIOD said the man, who was not identified, was arrested in Amsterdam on Wednesday. He is believed to have helped facilitate criminal transactions, including “funds stolen through hacks by a group believed to be associated with North Korea.” He faces money laundering charges.
In June the Financial Advanced Cyber Team division of the FIOD started an criminal investigation into Tornado Cash, the statement said. It found Tornado Cash had been used to conceal large-scale criminal money flows, including from (online) thefts of cryptocurrencies.
Further arrests have not been ruled out, prosecutors said.
Monday’s move froze any U.S. assets of the crypto mixer and generally bars Americans from dealing with it.
By Anthony Deutsch


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Crypto community split on Treasury’s Tornado Cash sanctions

Recent U.S. sanctions against cryptocurrency mixer Tornado Cash have sparked a debate within the crypto community on whether the ban compromises users’ ability to operate anonymously. 

Earlier this week, the Treasury Department imposed sanctions against Tornado Cash for helping hackers launder over $7 billion worth of virtual currency. The agency said the mixer service allowed cyber criminal groups, including North Korean-backed hackers, to use its platform to launder the proceeds of cyber crimes. 

The Treasury’s decision has the crypto community split — proponents of the service argue that the sanctions violate their right to privacy, while critics say the ban is a way to discourage criminals from using the platform to hide and launder illicit funds. 

“In an effort to punish hackers and cybercriminals, Treasury just made a clumsy attempt to sanction Tornado Cash, an open source protocol,” wrote Lia Holland, the campaigns and communications director at Fight for the Future, a digital rights advocacy group. 

Cryptocurrency mixers like Tornado Cash have become popular in recent years as crypto investors turned to the service to make their transactions anonymous and harder to trace by mixing their funds with others on the blockchain. 

Holland explained that regular transactions recorded on the blockchain are permanent, public and easily traceable, which made investors turn to mixers for better privacy. 

“Anonymity is not a crime, and there are many legitimate reasons to seek anonymity in financial transactions,” Holland said. 

For instance, she said using mixers could protect the identity of activists in authoritarian countries where exposing their financial information could get them imprisoned or executed.  

Holland added that the Treasury should focus on pursuing cyber criminals instead of sanctioning the tool they use to launder illicit proceeds. 

“This is a rough equivalent to sanctioning the email protocol in the early days of the internet, with the justification that email is often used to facilitate phishing attacks,” she said.  

Jake Chervinsky, head of policy at the Blockchain Association, recently said on Twitter that the sanctions may have opened a Pandora’s box, alluding to the potential for similar bans in the future.  

“There’s good reason why sanctions have always applied to entities, not technology,” Chervinsky said. “Treating Tornado Cash as an ‘entity’ makes little sense.” 

Meanwhile, critics of crypto mixers say they simply shouldn’t exist because they harbor criminal activity that often goes undetected and is harder to trace. 

“I look at [the sanctions] as a way to prevent some of those incentives for people to commit these types of crimes against enterprises,” said Bryan Daugherty, a certified cryptocurrency investigator and the public policy director at the Bitcoin Association.  

Daugherty added that crypto mixers are often used by criminal groups to obfuscate illicit funds and doesn’t see why non-criminal users would want to run the risk of using the same platform other than being anonymous.  

By using mixers, “you will run the risk of contaminating your legally-gained coins with somebody else’s illegally-gained coins,” Daugherty said.  

He added that it’s important to distinguish between privacy and anonymity in this context.  

He argued that investors should be able to operate with privacy on the blockchain where the public cannot identify, trace or access any users’ financial information, except for law enforcement if it has probable cause to do so. 

In the case of anonymity, the identity is completely hidden, which makes it harder even for the government to trace the transaction, Daugherty said. 

“You’re just incentivizing crime by being able to create anonymity,” he added. 

However, he did acknowledge that developers should improve privacy on the blockchain but not to the extent of allowing users to be anonymous like they have been on Tornado Cash and other crypto mixers. 

In Monday’s announcement, the Treasury Department said that the Lazarus Group, a state-sponsored hacking group tied to North Korea, used Tornado Cash to steal more than $455 million in cryptocurrency, the largest known virtual currency theft to date. The U.S. sanctioned the group in 2019. 

The agency also disclosed that Tornado Cash was used to launder more than $96 million of illicit cyber funds originating from the Harmony bridge heist, and at least $7.8 million from the Nomad crypto theft. 

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” said Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence, earlier this week. 

A senior administration official said during a background call to reporters that the sanctions against Tornado Cash are the latest action the U.S. has taken to crack down on North Korea’s ongoing illicit use of cryptocurrency.  

Treasury sanctioned another crypto mixer, Blender.io, in May, alleging that it was used to launder money from hackers backed by North Korea’s government. 

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A recent report from Chainalysis, a blockchain data firm, found that the use of crypto mixers reached an all-time high in 2022, with state-sponsored actors and cybercriminals making up a large portion of users.  

In 2022, illicit addresses account for 23 percent of funds sent to mixers, up from 12 percent in 2021, the report found.  

“Overall, if we label cybercriminal organizations with known nation state affiliations, we can see that these groups make up a significant and growing share of all illicit cryptocurrency sent to mixers,” the report said. 

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‘Look at that — wow!’ Fire tornado outside LA leaves cameraman lost for words

Wild footage caught a giant “fire tornado” shooting into the sky just north of Los Angeles, where firefighters are battling a blaze that has spanned nearly 150 acres.

An airborne news crew for KTLA was almost lost for words as it captured video of the incredible firenado late Wednesday, with flames sucked into a swirling vortex.

“Look at that — wow! Wooow — amazing,” the cameraman said in the clip, seen more than 1.8 million times on Twitter as of Thursday.

“That’s one of the — wow! — that is a tornado,” the airborne cameraman said, adding several more “wow”s before saying, “This is the biggest one I’ve ever seen.”

The clip ended with a firefighting helicopter dumping water on the Sam Fire inferno in Gorman, in the northern part of LA County.

The whirls, often called fire tornadoes or firenadoes, “tell the story of dry, receptive fuels and erratic winds from intense surface heating,” LA fire officials said in a tweet, sharing an image of the phenomenon.

“Look at that — wow! Wooow — amazing,” the KTLA cameraman said of the biggest fire tornado he’d ever seen.KTLA

The brush fire, which started just after 4 p.m. Wednesday, quickly spread, with more than 200 firefighters involved in tackling it.

KTLA’s crews also caught firefighters dropping water on the brush fire.KTLA

As of early Thursday, it had been 60% contained — but was still “holding at 150 acres,” the fire department said.

However, there had been “no damage to homes or reports of injuries at this time.”

Continue Reading ‘Look at that — wow!’ Fire tornado outside LA leaves cameraman lost for words

Fire Tornado Caught On Camera As Extreme Heat Hits Los Angeles County

Dramatic footage of a “fire tornado” was caught Wednesday as a wildfire ripped through Los Angeles County.More than 200 firefighters in Los Angeles were called out to the fast-moving, 4-acre Sam Fire in Gorman, California on Wednesday afternoon just after 4:00 p.m., according to the Los Angeles Times. Around 5:00 p.m., a large fire tornado, or “fire devil,” was caught on camera ripping through the hilly countryside, KTLA reported. Fire tornadoes are caused by rising heat mixing with high, choppy wind conditions, KTLA continued. Similarly to other tornados, the vortex created sucks in all combustible gases and any debris, the outlet continued. WATCH: Video from @KTLA shows a Fire Tornado in Los Angeles County.pic.twitter.com/Rs7TOlJjca — Breaking911 (@Breaking911) August 11, 2022 “Short range spotting and fire whirls on the Sam Fire tell the story of dry, receptive fuels and erratic winds from intense surface heat,” Los Angeles Country Fire Air Operations described in a tweet. No structures were immediately threatened by the wildfire and fire tornado, but one highway was closed in the area, KTLA noted. The fire held at around 150 acres, according to the LA Times. The fire tornado is the latest in a series of extreme weather events taking place throughout the western U.S. Death Valley experienced a rare, massive flooding event that trapped more than 1,000 inside the national park over the weekend. (RELATED: Extreme Drought Reveals Enormous Unexploded WWII Munition In Riverbed) Drought throughout the area surrounding Lake Mead, Nevada, has revealed at least four bodies once thought to be lost under the water. Police are continuing to investigate all of the discoveries.

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Incredible video shows 150-acre FIRE TORNADO burning outside Los Angeles

Incredible video shows a FIRE TORNADO form outside Los Angeles: Over 200 firefighters are battling brand new Sam Fire that started Wednesday and has already burned 150 acresThe Sam Fire broke in northwestern LA County around 5pm WednesdayThe blaze spun in a twister-like windstorm as it moved through hilly, open terrainBy 6.15pm fire crews declared it a second-alarm blaze spanning 148 acresFirefighters say the blaze is 60% contained and they are ‘making good progress’Crews will remain on scene throughout the night to extinguish any hot spotsBy Natasha Anderson For Dailymail.Com Published: 02:06 EDT, 11 August 2022 | Updated: 02:26 EDT, 11 August 2022

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Bitcoin Endures | CEFI Crypto Platforms Implode | Coinbase, Galaxy Digital Celsius, Tornado Cash

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