Tornado Cash developer receives 5-Year sentence for facilitating money laundering

A Dutch court has just ruled in the case of Alexey Pertsev, a co-developer of Tornado Cash cryptocurrency mixing platform. Pertsev has been given a sentence of 64 months in jail for his role in the creation and maintenance of the platform, which the court says has been used to conduct crimes and terrorism by hiding the origin, destination, and ownership of the crypto transactions,

 Court ruling on Tornado Cash Developer case

The firm, created by Pertsev and two others, was meant to offer community privacy solutions. Nevertheless, the investigations proved that it was involved in the laundering of roughly $1 billion. The $2 billion amount of Ethereum went through various thefts and hacks. Pertsev’s assertion that Tornado Cash was not made for illegal purposes was insufficient to dismiss the court’s findings that there was proof of this.

The court ruled Pertsev responsible for the development and the absence of measures to prevent abuse of Tornado Cash. It declared that the service was created, knowing the possibility of its misuse. To name a few, the North Korean hacking group Lazarus stole about $450 million worth of cryptocurrency. They sent it through Tornado Cash, thus showing that this service is very important for the criminal underworld.

Tornado Cash dev ruled liable for all illicit use, despite no ability to prevent it ‼️

We'll break down both the ruling itself and the craziness of the precedent set here by the case against Alex Pertsev, a developer and co-founder of the @TornadoCash project 🧵 pic.twitter.com/wRycZZGiBk

— Freedom.Tech (@freedomtech) May 14, 2024

 Defense and industry response

 In his defense, Pertsev’s team stressed the decentralized, open-source nature of Tornado Cash’s smart contracts and stated that blaming Pertsev for the users’ independent and anonymous actions was unreasonable. 

The court convicted him of money laundering, which reflected the problems of software developers in the decentralized finance (DeFi) sector.

This conclusion was made after another case in the US, which involved another Tornado Cash co-founder, Roman Storm, who was arrested on charges of helping criminals launder over a billion dollars in illicit funds.

Roman Semenov is being tried for money laundering and is still a fugitive. The US authorities’ position demonstrates that the developers could be responsible for the misuse of their software, even if they were not directly involved.