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Steve Muchoki
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One of the original engineers of Tornado Cash, the OFAC-sanctioned virtual currency mixer, Alexey Pertsev, will remain behind bars for another three months to allow further investigations. This ruling has been delivered by a Dutch court, according to several crypto reporters. Given the circumstances, the arrest of Pertsev has caused mixed reactions.
As such, the sanctioning of Tornado Cash has attracted tremendous support from crucial crypto companies like Coinbase Global Inc (NASDAQ: COIN) and 1inch. However, the urgent and persistent question popping up is when did writing open source code become a crime.
Furthermore, Coinbase CEO Brian Armstrong argued that the US government’s actions harm innocent people and threaten the future of decentralized finance (DeFi) and web3 specifically.
Nonetheless, the law will always look at the motive to derive a ruling. While the United States government sees staggering figures on crypto mixers – Tornado Cash is accused of laundering $7 billion worth of virtual currency since its creation in 2019 – the case is likely to proceed like the Silk Road one. Whereby Silk Road founder Ross Ulbricht was sentenced to double life imprisonment.
As such, investigations are likely to delve deeper into the original documents written by Pertsev. Whereby the defence team is expected to argue that Pertsev had no control over who used his open-source code.
2/ Alex is accused of creating open-source code that was used by @TornadoCash. But developers have no control whatsoever over how their code 💻 is subsequently used.
This could be the beginning of arrests of open-source developers because code might be used for illegal purposes.
— 1inch Network (@1inch) August 18, 2022
Notably, Pertsev has been under authority arrest since August 2022, when he was arrested in the Netherlands. Ultimately, Pertsev will likely be extradited to the United States, where he also faces several charges.
“…Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
Pertsev and Tornado Cash as the Scape Goat
The cryptocurrency market has been in existence for slightly over a decade. However, the industry has welcomed over 20,000 crypto projects, all using the Satoshi idea of a peer-to-peer electronic cash system. Nonetheless, global governments have been fighting to eliminate most of the cryptocurrencies and replacing with such as CBDCs.
Thereby confirming Gresham’s law, which states that bad money drives out good money. According to Gresham’s 16th-century observation, if coins containing different metals have the same legal tender value, the coins made of the cheaper metal will be used for payment, while those made of the more expensive metal will be hoarded or exported, and thus tend to disappear from circulation.
The Tornado Cash and Pertsev saga is a double-edged sword that the crypto community may want to give more review and consideration.
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