By
Mayowa Adebajo
June 17th, 2024
The outcome of Pertsev’s case has broader implications for the crypto industry, particularly for developers associated with platforms like Tornado Cash.
The Dutch court has handed down a significant sentence to Alexey Pertsev, one of the developers behind the creation of Tornado Cash, a crypto mixer platform. Pertsev has been sentenced to 64 months in prison, equivalent to five years and four months, for his involvement in aiding criminals launder $1.2 billion through the platform.
Lawyers representing Pertsev have up to 14 days to counter the court’s decision and plead for a reduced sentence. However, in the absence of the appeal, the 31-year-old Russian national who resides in the Netherlands will spend most of his thirties in prison.
Tornado Cash’s Troubled History
Dutch police arrested Pertsev in August 2022 following the ban of Tornado Cash by the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) for facilitation of money laundering activities.
At the time, the US government disclosed that the crypto mixer, designed to conceal the source of funds passing through the platform, has laundered around $7 billion for users.
The OFAC said that Tornado Cash was a critical tool for the notorious North Korean hacking group Lazarus, which has stolen billions of dollars from the crypto industry using various methods. After the ban, the platform’s developers became a person of interest to the government, leading to the arrest of Pertsev, who was accused of money laundering alongside his co-developers.
Legal Proceedings and Sentencing
During Pertsev’s trial in March, Dutch authorities argued that he failed to take sufficient measures to prevent criminals from using Tornado Cash for money laundering.
Pertsev’s defense team countered by highlighting the platform’s open-source nature and automated processes, which limit his control over user activities. Despite this argument, the court handed down a substantial sentence of nearly six years in prison at the sentencing hearing. One of the judges who oversaw the case said the crypto mixer was explicitly made for criminals and explained:
“Tornado Cash, in its nature and functioning, is a tool intended for criminals.”
Legal Precedents for Future Trials
The outcome of Pertsev’s case has broader implications for the crypto industry, particularly for developers associated with platforms like Tornado Cash. The trial has set a legal precedent for future trials of other Tornado Cash developers.
Two of the platform’s developers are currently facing money laundering charges in the United States. Roman Storm and Roman Semenov are facing similar allegations in the country as Pertsev for aiding criminals in laundering stolen funds and violating sanctions.
Storm was arrested by US authorities in August 2023 after the Department of Treasury added Tornado Cash again to its watchlist of sanctioned entities. In September last year, he pleaded not guilty to the charges and his trial has been scheduled for September 2024.
As for Semenov, authorities are unaware of his whereabouts and are working to ensure he is arrested to face the law.