Alexey Pertsev, the developer behind Tornado Cash, was freed from a prison sentence on February 7 and has been transferred to house arrest as he prepares for his legal appeal process. Dutch courts had suspended Pertsev’s pretrial detention, which he began serving in August 2022.
Despite being confined to his home and under electronic monitoring, Pertsev considers his release a welcomed upgrade to his situation as he expressed on his social media channels. Global privacy advocates have watched Pertsev’s case keenly, citing fears of a new legal precedent being set that could affect developers of privacy-focused technologies and immutable code.
The ‘s-Hertogenbosch Court of Appeal found Pertsev guilty of money laundering in May 2024, handing him a sentence of five years and four months. Interestingly, the verdict held Pertsev accountable for crimes committed through Tornado Cash, despite the fact that the platform’s developers don’t control the funds that circulate through the protocol.
Parallel to Pertsev’s case, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, claiming over $7 billion in illegal funds had been laundered using the service since 2019. Authorities also suggested that around $455 million stolen by a North Korean hacking group, Lazarus, had been laundered through Tornado Cash.
However, in a landmark ruling in November 2024, a US Appeals Court ruled that OFAC had overstepped its mandate by sanctioning Tornado Cash’s immutable contracts, opining that lines of immutable code, cannot be legally owned. Following this decision, a Texas District Court in January 2025 overturned the sanctions against Tornado Cash, symbolizing a pivotal shift for privacy-centric tools and regulatory strategies in the US. This case sets a precedent for future digital privacy cases in the United States.