Alexey Pertsev, the creator of the cryptocurrency mixing protocol Tornado Cash, has been convicted of money laundering, which could have significant implications for open-source code developers.
Pertsev was found guilty of money laundering by Dutch judges at the s-Hertogenbosch Court of Appeal on May 14. He received a sentence of five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets through the platform.
This verdict is surprising considering that Tornado Cash is a noncustodial crypto mixing protocol. This means that the protocol does not control or hold the funds that pass through it.
Despite the lack of control over the funds, Pertsev was still found guilty after being initially arrested in the Netherlands in August 2022, shortly after Tornado Cash was blacklisted by the United States government.
Pertsev’s legal representatives have 14 days to appeal the court’s decision.
This case has raised concerns among open-source code developers, as it could establish a precedent for holding developers responsible for how criminals utilize their code.
During Pertsev’s previous trial in March, prosecutors argued that the developer did not implement sufficient measures to prevent illicit money laundering.
Authorities have alleged that high-profile hackers, including the North Korean state-backed Lazarus Group, have used the protocol for criminal activities.
The Lazarus Group is believed to be responsible for the record-breaking $625 million hack on Axie Infinity’s Ronin Bridge in March 2022.
It is estimated that the group 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 comes in the wake of the arrest of the founders of Samourai Wallet. On April 24, it was reported that the CEO and CTO of the cryptocurrency wallet, Keonne Rodriguez and William Hill, respectively, are facing charges related to money laundering and operating an unlicensed money transmitting business.
The United States’ stance against Tornado Cash reflects a clear disregard for privacy, according to Amanda Tuminelli, the legal chief of the DeFi Education Fund.
The Department of Justice has challenged the motion to dismiss charges against Tornado Cash’s co-founder.