Alexey Pertsev, creator of the cryptocurrency mixing protocol Tornado Cash, has been found guilty of money laundering. This verdict could have significant implications for developers who work on open-source code projects.Â
Dutch judges at ‘s-Hertogenbosch court convicted Pertsev on May 14. They sentenced him to five years and four months in prison for allegedly laundering $1.2 billion in illicit assets through the platform.Â
This judgment is notable because Tornado Cash is a non-custodial crypto mixing protocol, meaning it doesn’t control or hold funds passing through it.Â
Despite not having control over the funds, Pertsev was found guilty. He had been in custody in the Netherlands since August 2022, following the U.S. government’s blacklisting of Tornado Cash.Â
Pertsev’s legal team has two weeks to appeal the court’s decision.Â
Privacy-Focused Protocols Under Regulatory ScrutinyÂ
Accusers alleged that Pertsev failed to recognize the illegal origins of some transactions on the platform he helped develop. However, there is no evidence indicating his active participation in criminal activities beyond his contribution to the open-source code.Â
This case has raised concerns among open-source code developers. It may establish a precedent for holding developers accountable for how their code is used by criminals.Â
During Pertsev’s trial in March, prosecutors argued that he didn’t implement enough safeguards to prevent money laundering.Â
Authorities claimed that notorious hackers, including the North Korean state-backed Lazarus Group, used the protocol. This group is suspected of orchestrating a $625 million hack on Axie Infinity’s Ronin Bridge in March 2022.Â
According to the U.S. Department of the Treasury, Tornado Cash reportedly laundered over $455 million of the stolen funds. Since its launch in 2019, the platform has facilitated over $7 billion in crypto laundering.Â
Pertsev’s sentencing follows the recent arrest of the founders of Samourai Wallet. Authorities charged the CEO and CTO of the cryptocurrency wallet with conspiracy to commit money laundering and operate an unlicensed money transmitting business on April 24.Â
The U.S. government’s actions against Tornado Cash indicate a clear stance against privacy, according to Amanda Tuminelli, legal chief at DeFi Education Fund.Â
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