News
The developer of Tornado Cash has been found guilty of laundering $1.2 billion in cryptocurrency
A jury in the Netherlands found Alexey Pertsev, one of the developers behind the cryptographic anonymization tool Tornado Cashguilty of money laundering.
Over the course of two days in March, the Russian citizen went on trial on charges that the tool he developed had allowed criminals, including hackers with ties to North Korea, to freely launder $1.2 billion in stolen cryptocurrencies. “Tornado Cash management welcomed the bank robbers with open arms,” prosecutors wrote in a March court filing.
Dutch judges on Tuesday sentenced Pertsev to five years and four months in prison, the sentence requested by the prosecutor’s office.
“With Tornado Cash, the defendant created a shortcut to finance crime and terrorism,” the court said in a statement, translated from Dutch. “He chose to look away from the abuse and took no responsibility.”
The purpose of tools like Tornado Cash, known as crypto mixers or tumblers, is to mask the origin and destination of users’ coins. Funds belonging to many parties are lumped together, mixed up and poured into brand new wallets, at which point it is no longer clear whose cryptocurrency it is. These services are promoted as a way to improve the level of privacy available to crypto users, but have been promptly co-opted for the purpose of money laundry.
On August 8, 2022, Tornado Cash was sanctioned in the United States, making it illegal for US citizens to use the service. Any product that “indiscriminately facilitates anonymous transactions,” the US Treasury’s Office of Foreign Assets Control wrote, poses a “threat to the national security of the United States.” Two days later, Pertsev was arrested in the Netherlands, where he resided.
The money laundering activity, Dutch prosecutors allege, accounted for more than 30% of the funds passed through Tornado Cash between 2019 and 2022. Meanwhile, Pertsev “deliberately looked away,” they say, without doing “ nothing” to prevent criminal activity. “Pertsev was not blind; he knew exactly what was happening but he chose not to intervene,” prosecutors wrote in the document.
Pertsev built his defense on the argument that Tornado Cash, which remains in operation, is not under anyone’s control, including his own, as it is software that runs on the Ethereum blockchain, a distributed network of computers.
While Pertsev can’t dictate how users interact with Tornado Cash directly through the blockchain, he and the other developers were effectively in control, prosecutors argued, because they ran the web interface through which most of it was powered. part of the transactions. Although Pertsev added features to the web interface that allowed legitimate users to separate their funds from those coming from known criminal addresses, he called the effort “too little, too late.”
Pertsev’s arrest sparked protests among cryptocurrency and privacy advocates, some of them established outside the courtroom on the opening day of the trial. His defenders complaint It’s unfair for an open source software developer to be held accountable for user behavior and claim that the verdict will have a discouraging effect on the development of privacy-preserving software.