Tornado Cash developer guilty of money laundering

Alexey Pertsev, the developer of the cryptocurrency mixing protocol Tornado Cash, has been found guilty of money laundering, raising potentially severe implications for open-source code developers.

Pertsev was found guilty of money laundering by Dutch judges at the s-Hertogenbosch Court of Appeal on May 14. The developer was sentenced to five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets on the platform.

The sentencing came despite Tornado Cash being a noncustodial crypto mixing protocol — meaning that the funds that go through the protocol are never held or controlled by it.

Despite having no control over the funds, the developer was found guilty after first being jailed in the Netherlands in August 2022, shortly after Tornado Cash was blacklisted by the United States government.

Pertsev’s legal representatives will have 14 days to appeal the court ruling.

Related: Crypto mixing is ‘not a crime,’ says CryptoQuant CEO

Privacy–focused protocols under regulatory scrutiny

According to a previous indictment, Pertsev should have suspected the illicit origins of some of the transactions on the platform that he co-developed.

There is currently no evidence of Pertsev actively facilitating any criminal transactions besides contributing to the open-source code of the crypto mixing protocol.

The ongoing case has sparked widespread concerns among open-source code developers, as it could set a precedent for punishing developers for how criminals use their code.

During Pertsev’s previous trial in March, prosecutors argued that the developer didn’t create sufficient guardrails to prevent illicit money laundering.

Authorities alleged that some of the most notorious hackers, such as the North Korean state-backed Lazarus Group, were among the criminals using the protocol.

The Lazarus Group is suspected to be behind the record $625 million hack on Axie Infinity’s Ronin Bridge in March 2022.

Lazarus allegedly laundered over $455 million worth of the stolen funds through Tornado Cash, which facilitated over $7 billion worth of crypto laundering since its launch in 2019, according to the U.S. Department of the Treasury’s Office of Foreign Assets Control.

Pertsev’s sentencing comes weeks after the arrest of the Samourai Wallet founders. On April 24, Cointelegraph reported that cryptocurrency wallet Samourai Wallet CEO Keonne Rodriguez and chief technology officer William Hill will each face one count of conspiracy to commit money laundering and one count of conspiracy to operate an unlicensed money transmitting business.

The United States’ stance against crypto mixer Tornado Cash shows a clear “disdain for privacy,” according to DeFi Education Fund legal chief Amanda Tuminelli.

Related: DOJ challenges motion to dismiss Tornado Cash co-founder’s charges


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