Kharon Company claimed the connection of Tornado Cash developer with the Russian Federal Security Service

What’s new? Analytics company Kharon published a report, according to which the developer of crypto mixer Tornado Cash Alexey Pertsev worked for a company associated with the Federal Security Service (FSB) of Russia. Representatives of the company came to this conclusion by studying the developer's profiles on social networks and analyzing the projects in which he worked.

Kharon's report

What does the report say? Tornado Cash runs on the software code developed by PepperSec, a company founded by Pertsev. Kharon further revealed that in 2017, Pertsev was an information security specialist and smart contract developer at Digital Security, a company that provided logistical support to the FSB.

The US Office of Foreign Assets Control (OFAC) alleges that Digital Security had been working on a project since 2015 that was supposed to “increase Russia's offensive cyber capabilities for intelligence services.” Since 2018, the company has been under sanctions by OFAC.

What is known about Kharon? The company provides data and analytical tools to optimize the core functions of financial crime compliance programs. Kharon was founded by former US Treasury Department officials and experienced software engineers. In late May, the company began partnering with cryptocurrency exchange Binance to strengthen the platform's KYC (Know Your Customer) procedures and sanctions monitoring.

What happened before? On August 8, the US Treasury Department put Tornado Cash on a sanctions list, claiming that hackers were using the service to launder billions of dollars. Two days later, Dutch authorities arrested Pertsev on suspicion of involvement in money laundering through a crypto mixer.

The authorities' actions provoked a negative reaction from the cryptocurrency community. The CEO of cryptocurrency exchange Kraken, Jesse Powell, called the sanctions a “hasty response” to protect consumers. Uniswap protocol founder Hayden Adams said sanctions against the service threatened free speech. Cardano network founder Charles Hoskinson said that programmers had no control over how people used the open source code they wrote.

To learn more about what awaits DeFi-projects after the sanctions against the crypto mixer, read GetBlock Magazine's editorial.