Detained in the Netherlands since August 2022, the developer of crypto blender Tornado Cash has been found guilty of money laundering. Alexey Pertsev has been sentenced to 64 months in prison, accused of laundering $1.2 billion. This conviction raises concerns for open source developers. It also rekindles the debate on the boundary between state repression of money laundering and the protection of blockchain users’ privacy.
More than 5 years in prison for the developer of Tornado Cash
The verdict has finally come in the case against the developer of Tornado Cash Alexey Pertsev to Dutch justice. According to several sources the developer of the crypto Tornado Cash was convicted of money laundering in the Netherlands on May 14. To this end, Alexey Pertsev was sentenced to 64 months in prison.
For the Dutch court, Alexey Pertsev did not individually commit any reprehensible acts. However, the 31-year-old Russian is convicted of maintaining an infrastructure that enabled criminals to launder their funds. According to the verdict, $1.2 billion in illicit assets were laundered via the crypto blender Tornado Cash.
Tornado Cash poses no obstacle to people with criminal assets wishing to launder them. The court therefore finds the defendant guilty of the money-laundering activities of which he is accused.
Verdict of the Dutch court of s-Hertogenbosch
Alexey Pertsev has been detained in the Netherlands since August 2022. He has been charged with money laundering via Tornado Cash between July 2019 and August 2022. While acknowledging his contribution to the development of the open source code of the Tornado Cash crypto mixing protocol, the accused has always denied actively facilitating criminal transactions. For Alexey Pertsev, Tornado Cash has no control over the funds and therefore cannot be held responsible for the criminal acts of its users.
Lawyers for the developer of Tornado Cash have 14 days to appeal his 64-month prison sentence.
The USA takes the lead in criminalizing Tornado Cash and Samurai
Judicial pressure against Tornado Cash in the Netherlands probably originated in the USA. Indeed, the USA has placed Tornado Cash on its blacklist in August 2022. The crypto blender was accused of laundering $7 billion in assets, including funds stolen by Lazarus a group of North Korean hackers. A few days after the US announcement, the developer Alexey Pertsev is arrested in the Netherlands.
After placing Tornado Cash on its blacklist, the U.S. has moved on to tracking down those affiliated with the crypto blender. Roman Storm and Roman Semenov two collaborators of Alexey Pertsev have been charged with money laundering and violating U.S. sanctions for their affiliation with Tornado Cash. While Semenov is still at large, Storm is under house arrest in Washington. He has pleaded not guilty in the United States and has received the support of several privacy advocates in the run-up to his trial.
The Tornado Cash case is a reminder of the troubles faced by those responsible for the crypto wallet Samurai in the USA. Indeed, Keonne Rodriguez and William Lonergan Hill, the co-founders of Samouraï Wallet, were arrested on March 24. They are accused of money laundering via their crypto blender.
Yet, Benjamin Franklin didn’t he warn us with the following quote? A people willing to sacrifice a little freedom for a little security deserves neither, and ends up losing both. How can a developer of an open-source protocol be responsible for the use of that same code? Should we put knife manufacturers in prison because certain individuals use them for criminal acts? The answer is obvious.
Developing a protocol that enables anonymous transactions and thus protects users’ privacy… is this now forbidden? This is not a crime, but rather a defense of the human right to privacy. The fact that malicious actors use a healthy protocol does not make its developers guilty. Otherwise, there would be nothing left of the traditional financial system through which transit more than $3.1 trillion in illicit funds by 2023. The necessary state crackdown on money laundering must not turn into a war against the blockchain & crypto ecosystem.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.
