Tornado Cash developer Pertsev arrested: Coders in firing line amid outrage over TORN sanctions
Updated
The crypto community has continued to decry US government sanctions on open-source crypto service Tornado Cash (TORN) and concerns are mounting that developers could be in the firing line as authorities on both sides of the Atlantic crack down on anonymous crypto payments solutions.
After the Dutch financial crimes agency, Fiscal Information and Investigation Service (FIOD), arrested a developer of virtual currency mixer Tornado Cash (TORN) last week, crypto commentators rallied to condemn the decision.
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Crypto community outraged by the arrest
FOID arrested Alexey Pertsev, 29, in Amsterdam on 10 August for his alleged “involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralised Ethereum mixing service Tornado Cash”.
Four days before that, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the crypto mixer Tornado Cash - a solution which allows for anonymous payments. OFAC claimed that [Tornado Cash] “has been used to launder more than $7bn worth of virtual currency since its creation in 2019.”
Many commentators on Twitter were shocked by the arrest of the developer.
“It's insane that the developer of Tornado Cash was arrested for writing code that aims to improve crypto privacy,” co-founder of chief operating officer at crypto data provider, CoinGecko, Bobby Ong, wrote in a tweet.
“The authorities should go after the parties misusing the code for nefarious purposes, not the creator of the code. More devs will choose to build anonymously,” he added.
A pseudonymous Dutch computer analyst going by ‘Plan B’ said: “Dutch IRS (sic) doing dirty job for the US. Arresting an open source developer because 'criminals' might have used the open source (!) software. A disgrace to my country and my hometown Amsterdam.”
Brian Armstrong, chief executive officer at one of the world's biggest cryptocurrency exchanges, Binance, wrote that “...no developer should be arrested for publishing open source software, even if that software is used by bad actors.”
Armstrong also predicted that Pertsev's arrest will lead to more developers working in anonymity.
What does Tornado Cash do?
Tornado Cash (TORN) is a so-called crypto mixer that obfuscates and mashes up cryptocurrency transactions to allow anonymous payments. In practice, mixers achieve this by disconnecting funds sent and funds withdrawn, which is done by pooling together a large number of deposited funds and randomly mixing them.
TORN uses a so-called zero-knowledge proof cryptographic protocol or ‘Zero-Knowledge Succinct Non-Interactive Argument of Knowledge’ (zk-SNark). This allows one side of the contract to prove that it has permission to make a withdrawal without revealing information about their deposit and therefore their identity.
Who developed Tornado Cash?
Pertsev was TORN's developer since 2019. Tornado Cash was co-founded by Roman Semenov and Roman Storm in August 2019.
Is Tornado Cash decentralized?
In a blog post from March 2020, the team behind Tornado Cash wrote: “From now on, Tornado.cash is largely living by the precepts that code is law. The Tornado.cash smart contracts are running on Ethereum and the community has the decision on whether or not to use our tools.”
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