Dutch authorities arrested a 29-year-old man in Amsterdam suspected of being involved in concealing criminal financial flows and facilitating money laundering through cryptocurrency service Tornado Cash.

The man, described as a “developer” for the service, was apprehended in Amsterdam on Aug. 10. Officials had not ruled out the possibility of multiple arrests, according to a Friday statement from the Dutch Fiscal Information and Investigation Service, or FIOD. 

The investigators declined to comment on any additional details about the man’s identity. Tornado Cash co-founders Roman Semenov and Roman Storm did not immediately respond to requests for comment. 

In June 2022, a FIOD unit known as the Financial Advanced Cyber Team, or FACT, opened a criminal investigation into Tornado Cash, according to the statement. Investigators in that unit suspect that “Tornado Cash has been used to conceal large-scale criminal money flows,” according to the statement. These money flows allegedly include funds stolen through hacks by a group believed by Dutch officials to be associated with North Korea.

The arrest comes after the US Treasury Department issued sanctions against Tornado Cash on Monday, alleging that the service had been used by hackers to launder more than US$7 billion in virtual assets. Lazarus, a group affiliated with North Korea, had laundered around US$450 million through the service, a Treasury official said.

Tornado Cash is known in the crypto industry as a privacy mixer, a platform that facilitates anonymous transactions by jumbling cryptocurrency funds from different sources before sending them to the ultimate receiver. It gained a controversial reputation after it was used by hackers in several high-profile crypto heists this year, including the US$600 million exploit of a platform attached to blockchain game Axie Infinity.

News of the sanctions has reverberated throughout the crypto sector, generating a widespread debate around the limits governments face when trying to police the use of cryptocurrency services. Despite its reputation with hackers, many in the cryptocurrency sector defended Tornado’s utility as tool to offer privacy for legitimate transactions.

 “This appears scapegoating entirely the wrong people for the right reasons. I hope that’s not the case,” said Simon Taylor, head of strategy at crypto anti-fraud startup Sardine.

“I don’t think anyone wants North Korea to be able to hack and scam consumers and get away with it,” he said. “But we don’t solve that by arresting developers who are building privacy tools. We work with them. This risks turning crypto away from governments. Which till now was coming together and legitimizing.”