Alexey Pertsev, creator of Tornado Cash, a cryptocurrency mixing protocol, has been convicted for money laundering. This alarming verdict could significantly impact open-source code developers as Pertsev was sentenced to over five years imprisonment for reportedly washing $1.2 billion worth of unauthorized assets through the platform. This verdict was reached even though Tornado Cash, being a noncustodial crypto mixer, does not hold or control any funds channelled through it.
Pertsev was initially incarcerated in the Netherlands back in August 2022 after the U.S. government blacklisted Tornado Cash. He is now guilty of his charges according to Dutch judges at the s-Hertogenbosch Court of Appeal despite not having direct conduct over the fund. His legal team has a two-week window to contest this court decision.
The indictment intimates that Pertsev should have raised alarm over certain transactions on the platform he co-built. As it stands, no solid evidence exists showing Pertsev’s direct engagement in any illegal transactions beyond contributing to the open-source crypto mixing protocol. Nevertheless, the charges bring the practice of open-source code development under the spotlight, suggesting developers could be penalized for any criminal use of their code.
Prosecutors at Pertsev’s previous trial in March contended that he failed to implement adequate procedures to discourage money laundering. The protocol has allegedly been used by infamous hackers, including the North Korean-backed Lazarus Group, identified as the culprits behind the monumental $625 million breach of Axie Infinity’s Ronin Bridge in March 2022.
This conviction follows closely on the heels of the Samourai Wallet founders’ arrest in late April. Their charges parallel those of Pertsev, signalling the U.S government’s tough stance against crypto mixers such as Tornado Cash suspected of facilitating crypto laundering.