The co-founder and developer of Tornado Cash, Alexey Pertsev, was denied bail.
It is reported by DL News, according to which Pertsev was denied bail to appeal against the conviction for money laundering.
Tornado Cash: the conviction of Alexey Pertsev
Pertsev was arrested in 2022 in the Netherlands, and in May of this year he was convicted of money laundering by a Dutch court.
The co-founder and developer of Tornado Cash is accused of having created a tool to commit criminal acts, and in particular money laundering.
Tornado Cash is a tool that makes it very difficult to trace the sender of an on-chain transaction.
The fact that it is actually possible to hide the sender of a transaction, even though it is recorded in clear on a public blockchain, makes things easier for those who want to launder dirty money using criptovalute.
Pertsev therefore was found guilty in a money laundering case and was sentenced to 64 months in prison (a little over 5 years).
The fact is that the court found that between 2019 and 2022 a true “modus operandi” for money laundering had been developed, also suspecting illicit origins for some transactions that took place through Tornado Cash.
When he was arrested, a warrant had been issued against him by the USA, which considers Tornado Cash a key tool used by the North Korean hacker group Lazarus.
Bail denied to Alexey Pertsev, co-founder of Tornado Cash
After the conviction, Pertsev had submitted a request for release on bail to the Dutch court.
According to what was reported to DL News, the Court of Appeal of ‘s-Hertogenbosch, in the Netherlands, rejected this request, ruling that Pertsev will continue to remain in prison.
By now he has been in prison for about two months, where he is not even allowed access to a computer or the Internet.
Now Pertsev will appeal against the conviction, but in the meantime, he will be forced to remain in prison.
His defense attorneys, Keith Cheng and Judith de Boer, claim that he would need a computer and the Internet to prepare for the appeal trial, but apparently, Dutch justice does not consider it necessary to grant him this privilege.
Furthermore, the defense lawyers argue that there would not even be a risk of flight and that the Dutch stubbornness did not want to grant him this privilege. The defense lawyers also argue that there is no risk of flight, but evidently the Court of Appeal did not believe this hypothesis.
The defense
During a hearing held last month, one of the defense attorneys presented 18 points for the appeal. According to the defense and the defendant, Pertsev would have needed access to at least one computer to process the appeal request.
The defense attorney also submitted a request to the prison director, asking him to provide his client in prison with digital facilities and unlimited Internet access, but the prison director also refused.
The point is that the prison’s security policy does not allow inmates to be granted computers and Internet access.
The case, however, as the defense attorney points out, revolves precisely around technical aspects of DeFi, related to smart contracts and protocol governance, for which Internet access is necessary.
Furthermore, it also points out that this type of preparation cannot be done by a lawyer, but they need the collaboration of Pertsev, because they are not well-versed in the more technical aspects of his case.
According to Pertsev’s defense lawyer, Keith Cheng, his detention would violate the European Convention on Human Rights, which enshrines the right of every individual to a fair trial.
The accusations for money laundering
The accusations against Pertsev are not, however, generic.
They specifically concern 2.2 billion dollars in cryptocurrencies stolen from various exchanges or protocols, and then made untraceable through the Tornado Cash mixer.
According to the judges, Pertsev and his co-developers should have prevented criminals, and in particular the North Korean hackers of the Lazarus Group, from laundering illicit proceeds through their platform.
Tornado Cash, however, is an open-source, decentralized protocol. This means that not even the developers could block transactions.
The court maintains that Pertsev and associates voluntarily wanted to make available to everyone, including criminals, a useful tool for laundering money in this way, meaning they were aware that it would be used in this manner. At that point, they were condemned precisely for not wanting to prevent it.
In other words, the acts of money laundering occurred, and both parties admit it. It’s just that according to the judges, this was made possible knowingly by Pertsev, while Pertsev argues that he cannot be held responsible for acts he did not commit.
In fact, he is accused of aiding and abetting, but the sentence handed down explicitly accuses him of money laundering, as if he were involved.