A 29-year old man was arrested in Amsterdam on suspicion of being involved in the development of open-source software Tornado Cash, “concealing criminal financial flows and facilitating money laundering”.
The arrest was made by fiscal Information and Investigation Service (FIOD) of the Netherlands. A spokesperson of the FIOD said that multiple arrests aren’t ruled out.
The identify of the Tornado Cash “developer” and the exact allegations are currently unknown.
However, the arrest caused outrage among privacy experts as well as bitcoin and crypto enthusiasts. Arresting a developer for writing open-source code that was used by certain bad actors would be unprecedented in this form.
If the criminal charges are made on the basis of contributing code to Tornado Cash, this would be a red flag from a privacy stand point. Some are calling the actions of the FIOD the “war on code” and others were fearful that such actions could one day be taken against Bitcoin Core developers.
On the other hand, if the arrested individual was involved in illegal activities directly facilitating or profiting from money laundering using Tornado Cash, this wouldn’t be anything new.
The big question is: Was the alleged developer arrested for coding the now sanctioned Tornado Cash software? Or was the person arrested for direct involvement in criminal activities and money laundering?
The cypherpunks already fought the “war on code” when the U.S. government attempted to outlaw certain privacy-enhancing tools in the early days of the Internet.
The idea that code is simply “free speech”, and criminalizing code is a serious threat to privacy and human rights was illustrated when cypherpunks replicated illegal software code in books and printed it on T-shirts.
Were these books and T-shirts illegal as well because they carried the same code?
It’s important to keep in mind that Tornado Cash and Bitcoin are involved in two very different narratives. The narrative that Bitcoin is mainly used by criminals and to launder money seems to have died out, shifting the conversation around its environmental impact.
It seems unlikely that this narrative will come back and Bitcoin Core developers would be targeted in the same way. However, privacy-enhancing tools such as mixers and CoinJoins that are used more frequently for illicit activities might experience more heat.
