A Dutch panel of judges has found Alexei Pertsev, one of the developers of the virtual currency anonymization tool TornadoCash, guilty of money laundering.
Over two days in March, the Russian used a tool he developed to give criminals, some of them hackers with ties to North Korea, $1.2 billion worth of stolen cryptocurrencies. A trial was held on charges of allowing people to launder freely. “Tornado Cash's management welcomed the bank robbers with open arms,” prosecutors said in a March court filing.
A Dutch judge on Tuesday sentenced Pertsev to the five years and four months in prison sought by prosecutors in the case.
“With Tornado Cash, the defendants created a shortcut to criminal and terrorist financing,” 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 hide the source and destination of users' coins. Funds belonging to many parties are pooled, jumbled, and dumped into brand new wallets, by which time it is no longer clear whose crypto belongs to whom. Although these services are promoted as a way to increase the level of privacy available to cryptocurrency users, they are easily exploited for money laundering purposes.
On August 8, 2022, Tornado Cash was sanctioned in the United States, making it illegal for U.S. citizens to use the service. Any product that “indiscriminately facilitates anonymous transactions” is a “threat to the national security of the United States,” writes the U.S. Treasury Department's Office of Foreign Assets Control. Two days later, Pertsev was arrested in the Netherlands, where he lived.
Dutch prosecutors allege that more than 30% of the funds that passed through Tornado Cash between 2019 and 2022 were money laundering activities. Meanwhile, Pertsev “deliberately averted his eyes” and did “nothing” to stop the criminal activity, the statement said. “Pertsev was not blind. He was well aware of what was happening, but he chose not to intervene,” prosecutors wrote in their filing.
Pertsev's defense rests on the argument that TornadoCash, which is still in operation, is not under anyone's control, including himself, as part of software running on the Ethereum blockchain, a decentralized network of computers. I did it.
Although Pertsev cannot dictate how users interact with Tornado Cash directly through the blockchain, he and other developers were working with a web interface that provides the majority of transactions. The prosecution argued that they were under de facto control. Pertsev added features to the web interface that allow legitimate users to separate their funds from funds coming from known criminal addresses, but characterized the effort as “too little, too late.”
Pertsev's arrest sparked protests among cryptocurrency and privacy advocates. proven Outside the courtroom on the first day of the trial.his defenders Claim It says it is unfair for open source software developers to be held responsible for the actions of their users, and the ruling will have a chilling effect on the development of privacy-protecting software.
