Alexey Pertsev, the creator of the cryptocurrency mixing protocol Tornado Cash, has been found guilty of money laundering, a verdict that could have significant implications for open-source code developers.
On May 14, Dutch judges at the s-Hertogenbosch Court of Appeal sentenced Pertsev to five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets on the Tornado Cash platform.
This ruling is surprising considering that Tornado Cash is a noncustodial crypto mixing protocol, meaning that the funds passing through the platform are never held or controlled by it.
Pertsev’s conviction follows his initial arrest in the Netherlands in August 2022, shortly after Tornado Cash was blacklisted by the United States government.
Pertsev’s legal team will have 14 days to appeal the court’s decision.
The ongoing case has raised concerns among open-source code developers, as it could establish a precedent for holding developers accountable for how criminals utilize their code.
During the previous trial in March, prosecutors argued that Pertsev failed to implement sufficient safeguards to prevent illicit money laundering.
Authorities alleged that notorious hackers, including the North Korean state-backed Lazarus Group, utilized the protocol for their criminal activities.
The Lazarus Group is suspected of orchestrating the record-breaking $625 million hack on Axie Infinity’s Ronin Bridge in March 2022. It is believed that they laundered over $455 million of the stolen funds through Tornado Cash, which has facilitated over $7 billion worth of crypto laundering since its launch in 2019, according to the U.S. Department of the Treasury’s Office of Foreign Assets Control.
Pertsev’s sentencing follows the recent arrest of the founders of Samourai Wallet. On April 24, it was reported that Samourai Wallet CEO Keonne Rodriguez and CTO William Hill will each face charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business.
The United States’ opposition to crypto mixer Tornado Cash is seen by some as a clear disregard for privacy, according to Amanda Tuminelli, the legal chief of DeFi Education Fund.
The Department of Justice has also challenged the motion to dismiss charges against Tornado Cash co-founder.