14 May 2024
Alexey Pertsev, a developer for the Ethereum-based crypto mixer Tornado Cash, has been sentenced to 64 months in prison after a Dutch court found him guilty of money laundering charges on Tuesday.
The judge stated that the platform was “intended for criminals” and that Pertsev should have been suspicious of the criminal origins of transactions.
The closely-watched case marks a major blow to financial privacy advocates. Many critics argue that Pertsev is being unfairly targeted as the developer of an open-source platform.
Further, they say he did not have control over how users chose to employ Tornado Cash to obscure transaction histories on the public blockchain.
Nonetheless, prosecutors successfully argued that Pertsev did too little to prevent the mixer from being utilized for money laundering.
They rejected claims that his obligations were lessened due to the decentralized nature of the platform’s operations.
Experts predict it will have a chilling effect on development of open-source tools that enable anonymity on Bitcoin and other blockchains. They argue it sets a precedent for holding developers liable for the actions of anonymous users.
Tornado Cash was sanctioned by the US Treasury Department in 2022 over allegations it obscured funds stolen by North Korean state hackers. Pertsev was arrested days later, dealing a major blow to the embryonic crypto privacy sector.