Bitrabo Editorial
Alexey Pertsev, a co-developer of Tornado Cash, has been sentenced to 64 months in prison by the Oost-Brabant district court in the Netherlands for his role in creating and managing the crypto mixing tool. The court claims that Tornado Cash has enabled criminal activities and terrorism.
Pertsev, in collaboration with two others, created Tornado Cash, a tool designed to hide the source, ownership, and destination of cryptocurrency transactions.
Tornado Cash Alleged to Facilitate a $2B Money Laundering Scheme
An investigation by the court uncovered that Tornado Cash purportedly facilitated the laundering of around $1.2 billion in Ethereum (ETH) originating from 36 different thefts or hacks. The actual amount laundered could surpass $2.2 billion based on the criteria used for selecting these hacks.
The court recognized the potential for cryptocurrency laundering from various other criminal activities. Despite Pertsev’s assertion that Tornado Cash aimed to provide privacy solutions for the crypto community without supporting criminal operations, the court found the tool actively involved in money laundering.
The court emphasized Pertsev and his colleagues’ accountability for the tool’s operations and its failure to implement measures to prevent misuse. They allege that Tornado Cash was developed with the full knowledge of its potential for money laundering.
Additionally, Pertsev was purportedly aware of discussions in chat groups regarding stolen Ether and illicitly sourced cryptocurrency being deposited into Tornado Cash. Nevertheless, he continued to develop and offer the tool without imposing constraints or monitoring.
Arrest and Legal Charges
Tornado Cash was created to provide maximum anonymity and concealment, making identification, supervision, or investigation difficult. The Dutch court asserts that its automated concealment actions for money laundering made it appealing to criminal users.
Almost $450 million in cryptocurrency stolen in the notorious “Axie Infinity hack” by the North Korean hacking group Lazarus Group was reportedly funneled into Tornado Cash and subsequently laundered, illustrating the tool’s value to criminal elements.
The court sentenced Pertsev to 64 months in prison in line with the prosecution’s request. It also ruled against returning Pertsev’s seized Porsche and approximately €1.9 million worth of cryptocurrency.
Another co-founder of Tornado Cash, Roman Storm, was apprehended in the United States last year, while the third co-founder, Roman Semenov, remains at large and faces money laundering charges.
The cryptocurrency market is currently valued at $2.1 trillion. Bitcoin (BTC), the primary cryptocurrency, is trading at $61,800, with its $61,000 support line crucial in preventing further downward movements.
Featured image from Shutterstock, chart from TradingView.com