Arrested Tornado Cash Dev Was Previously Employed By Firm Linked To Russia’s FSB
- Arrested Tornado Cash developer Alexey Pertsev was previously hired as an employee by a company linked to the Federal Security Service of the Russian Federation, or FSB.
- The Dutch government arrested Pertsev on the grounds of “involvement in concealing criminal financial flows and facilitating money laundering.”
Arrested Ethereum mixer Tornado Cash developer Alexey Pertsev was arrested by Dutch authorities and was denied bail as well. The authorities are strongly moving against Pertsev, and it seems that the developer’s link to Russian authorities might be having something to do with this as well.
In a new report from Fortune, it was revealed that the Tornado Cash developer was previously hired as an employee by a company linked to Federal Security Service of the Russian Federation or FSB, a Russian security agency.
After the recent sanctions imposed by the Treasury Department on the Ethereum mixer on Aug. 8, which alleged that hacking groups including North Korea’s Lazarus Group have used the service to launder billions of dollars, the entire community has been trying to withstand the regulatory heat.
Meanwhile, the Dutch government arrested Pertsev on the grounds of “involvement in concealing criminal financial flows and facilitating money laundering.” However, the move was being planned for long, as covered in a report by BitcoinWisdom and was not a spontaneous move initited following Treasury’s move.
“This opens up a lot of credibility issues for the developers of Tornado Cash. This is pretty profound information that informs why the U.S. government and Dutch authorities have taken certain actions,”
said Alex Zerden, an adjunct senior fellow at the Center for a New American Security.
Interestingly, the supporters of the Ethereum mixer voiced their concerns, stating that the US and Dutch authorities are targeting the open-source software for unknown reasons, the background reveal of Pertsev leads to the fact that there might be some other information that the public doesn’t know about the sanctions.
Tornado Cash uses the software made by Delaware-registered corporation called PepperSec. As per a report from Karon, an analytics firm, the founder and CEO of that company is Pertsev. The firm also found that the developer worked as an information security specialist and developer of smart contracts for Digital Security OOO, “a Russian entity that the Treasury Department designated in 2018 as providing material and technological support to the FSB as far back as 2015,” Fortune confirmed.
“You had this guy working for [Digital Security OOO] and doing pen testing himself, and then Treasury designated the company for helping the FSB’s hacking capabilities,”
said Nick Grothaus, vice president of research at Kharon.
Backlash following Tornado Cash sanctions
Meanwhile, Tornado Cash has been trying hard to continue its operations and there has been a strong public backlash as well. Republican Tom Emmer (R-Minn.) wrote an open letter adressed to the Treasury Secretary Janet Yellen, saying that the sanctions “impact not only our national security, but the right to privacy of every American citizen.”
Crypto-focused policy think tank, Coin Center added that it will challenge the sanctions imposed by the the United States Treasury Department’s Office of Foreign Assets Control (OFAC) on Ethereum-based crypto mixer.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
