Tornado Cash Creator Faces 5-Year Jail Over $1.2B Money Laundering Case

The crypto world and the legal world have been closely tied together lately.

Now, a Dutch court has found Alexey Pertsev, the creator of the innovative crypto platform Tornado Cash, guilty of laundering an eye-popping $1.2 billion in illicit funds. Pertsev, a 31-year-old Russian national, now faces a hefty five-year prison sentence after the verdict was delivered on May 14.

Behind Bars Since 2022: Pertsev Case Details

Alexey Pertsev, the mastermind behind the Tornado Cash cryptocurrency mixing protocol, has been under arrest in the Netherlands since August 2022, following the blacklisting of Tornado Cash by the United States government. 

The court’s decision was grounded on accusations that Pertsev did not appropriately prevent criminals from exploiting Tornado Cash for money laundering activities.

During the trial, prosecutors argued that Pertsev didn’t take enough steps to stop criminals from exploiting Tornado Cash for money laundering, despite its decentralized setup. On the flip side, the defense claimed that Pertsev’s hands-off approach, necessitated by Tornado Cash’s decentralized design, meant he shouldn’t be held responsible for users’ actions.

A three-judge panel delivered a damning verdict, convicting Pertsev of laundering $1.2 billion in illicit assets. With a five-year prison term looming, Pertsev’s legal team has a 14-day window to appeal, setting the stage for a legal battle.

Tornado Cash’s Functionality

Tornado Cash functions as a decentralized protocol on the Ethereum blockchain, designed to enhance transaction privacy by blurring transaction histories. Despite its technological purpose, prosecutors claim that legal responsibilities outweighed technological concepts, particularly in preventing platforms from aiding criminal activities.

Misuse of Tornado Cash

Meanwhile, the public prosecutor Martine Boerlage argued that Tornado Cash operated in a structured manner similar to a company, despite claims of leaderless governance.

However, the US Office of Foreign Assets Control reported that Tornado Cash has been used to launder over $7 billion in crypto from hacks and heists. The North Korean cybercrime organization Lazarus Group, suspected in the record $625 million Axie Infinity Ronin Bridge hack in March 2022, is a primary perpetrator.

Community Responds

Pertsev’s conviction has sent shockwaves through the crypto community, prompting calls to support him through his legal ordeal. Amidst the rallying cries for justice, efforts to cover Pertsev’s substantial legal fees gain traction.

Meanwhile, Roman Storm, another Tornado Cash developer, awaits his own legal reckoning in the United States, set for September 23, as previously reported by Coinpedia News.

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This case raises questions about the future of cryptocurrency regulation. What do you think?