Tornado Cash Grappling With Fallout, as Discord Goes Offline and Dev Is Arrested
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Tornado Cash Grappling With Fallout, as Discord Goes Offline and Dev Is Arrested

1 year ago

After being blacklisted by the U.S. federal government, the bad news came thick and fast for the crypto mixer.

Tornado Cash Grappling With Fallout, as Discord Goes Offline and Dev Is Arrested


Tornado Cash may struggle to recover from U.S. government sanctions after the crypto mixing service then saw 29-year-old developer Alexey Pertsev arrested. The Netherlands-based Russian is suspected of being involved in concealing criminal cash flows and facilitating money laundering through Tornado Cash.

The Dutch Fiscal Information and Investigation Service (FIOD) said further arrests could follow as it investigates suspicions of fraud, environmental crime and asset confiscation.

The arrest drew ire from Crypto Twitter. Cinneamhain Ventures partner Adam Cochran was understandably upset by the implications of the arrest:

Several other accounts voiced similar concerns over what the arrest could mean for cryptocurrency as a whole.

Tornado Cash Discord Offline

Tornado Cash also lost its Discord server and governance forum, which were used to organize the DAO and discuss governance proposals.

The protocol may struggle to stay alive after this development, with internet service providers likely refusing to service Tornado Cash over fears of being targeted by the U.S. government.

Still, according to Decrypt, the community managed to pass a change that allows the protocol to still manage its $22 million treasury. The governance contract was added to Tornado's multisig, as developers attempt to make it easier to approve transactions even if "something happens to 2 signers."
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