Scandal crypto: Tornado Cash developer sentenced for money laundering, the latest news



Crypto news: Alexey Pertsev, the developer of Tornado Cash, judged guilty in a money laundering case. Specifically, Pertsev’s sentence is 64 months in prison by a Dutch court.

Let’s see all the details below. 

Crypto news: Alexey Pertsev, founder of Tornado Cash, faces legal consequences

As anticipated, Alexey Pertsev, the developer of Tornado Cash, has been sentenced for money laundering by a Dutch judge at the court of S-Hertogenbosch. The verdict came on Tuesday, with Pertsev sentenced to 64 months in prison.

According to the indictment shared before the trial, between July 9, 2019 and August 10, 2022, Pertsev developed a “modus operandi” for money laundering, suspecting at least the illicit origins of transactions on the Tornado Cash platform.

The arrest of Pertsev took place in the Netherlands in August 2022, following the inclusion of Tornado Cash in the blacklist of the United States government. 

At that time, the United States Treasury had declared that Tornado Cash was a key tool of the North Korean hacker group Lazarus, linked to various cryptocurrency thefts. Including those on the Axie Infinity Ronin network for 625 million dollars. cryptocurrencies.

The outcome of the process could influence the next accusations against other Tornado Cash developers. 

Roman Storm and Roman Semenov, other developers of the cryptocurrency mixer, are also facing charges of money laundering and sanctions violations in the United States. Storm will stand trial in September, while Semenov is still awaiting arrest. 

In the United States, however, Storm is not accused of having laundered 1.2 billion dollars, due to differences in US and Dutch laws regarding personal liability in this type of alleged crime.

Storm’s defense rejected in the Tornado Cash case

At the end of March, Storm filed a motion to dismiss all three charges against him. 

Specifically claiming not to have engaged in money laundering activities and not to have violated the International Emergency Economic Powers Act.

His defense argued that Tornado Cash does not constitute a custody service and does not fall within the definition of a “financial institution”. 

They also argued that Storm had no control over the service and could not prevent entities like the Lazarus Group from using it. According to the defense, developing the code for the project did not equate to managing a money laundering entity.

However, the United States Department of Justice (DOJ) rejected Storm’s motion. 

In particular, arguing that the service was announced in 2019 as a mixer and included a website, a user interface, a combination of smart contracts, and a network of “relayers”.

The Department of Justice has stated that Storm cannot dismiss the accusation based on his disputed view of how Tornado Cash service operates or his selfish version of his intent.

As reported, the United States Treasury has added Tornado Cash to its list of Specially Designated Nationals, effectively prohibiting Americans from using this mixer.

What does it mean that Tornado Cash is on the blacklist of the US Department of the Treasury?

As mentioned, the Department of the Treasury has issued a ban for all Americans to use the decentralized crypto-mixing service Tornado Cash. 

The Office of Foreign Assets Control (OFAC), responsible for preventing sanctions violations, has added Tornado Cash to its list of Specially Designated Nationals. This list includes individuals, entities, and cryptocurrency addresses subject to sanctions. 

As a result, it is prohibited for US citizens and entities to interact with Tornado Cash or any Ethereum wallet address linked to the protocol, with possible criminal penalties for those who violate the directive.

The analysis of the blockchain has revealed that tens of millions of dollars in stolen cryptocurrencies from Ronin have passed through Tornado Cash, which is designed to obscure the origin of the funds.

Previously, OFAC sanctioned, another mixing service, accused by the Department of the Treasury of contributing to the laundering of ransomware proceeds, as well as about 20.5 million dollars in cryptocurrencies stolen from Ronin.