May 16, 2024 12:25
TheOost-Brabant district court in the Netherlands has sentenced Alexey Pertsev,co-developer of the popular cryptocurrency mixing tool Tornado Cash, to 64months in prison for his role in creating and maintaining the platform.
The courtalleges that Tornado Cash enables "criminal activity and terrorism"by concealing the origin, destination and ownership of the crypto transactions.
Tornado Cash Developer Sentencedto 5 Years and 4 Months Behind Bars
Pertsev,along with two other individuals, developed Tornado Cash to offer privacysolutions for the crypto community. However, the court's investigation revealedthat the tool allegedly facilitated the laundering of approximately $1.2billion to $2.2 billion in Ethereum (ETH), derived from various thefts andhacks.
DespitePertsev's assertion that Tornado Cash was not designed to facilitate criminalactivities, the court determined that the tool was actively used for moneylaundering. The court highlighted that Pertsev and his co-founders wereaccountable for the operation of Tornado Cash and its "lack of measures toprevent abuse," stating they developed it with full knowledge of itspotential for illicit use.
Tornado Cash dev ruled liable for all illicit use, despite no ability to prevent it We'll break down both the ruling itself and the craziness of the precedent set here by the case against Alex Pertsev, a developer and co-founder of the @TornadoCash project pic.twitter.com/wRycZZGiBk
Freedom.Tech (@freedomtech)
May 14, 2024A cryptomixer, also known as a cryptocurrency tumbler, is a service that mixes varioustransactions to obscure the origins and destinations of crypto assets. Thisprocess enhances privacy and anonymity for users by breaking the link betweenthe sender and receiver of a transaction.
The courtpointed out that approximately $450 million in cryptocurrency, stolen by theNorth Korean hacking group Lazarus in the "Axie Infinity hack," wasfunneled through Tornado Cash and laundered, underscoring the tool's"significant value to the criminal underworld."
In additionto the prison sentence, the court decided not to return Pertsev's seizedPorsche and roughly 1.9 million in cryptocurrency.
The firstissues for Tornado Cash began in 2022 when the platform was blacklisted in theUnited States.
Here's the list of Tornado Cash resources that were banned- Tornado Cash @GitHub organization- personal @GitHub accounts of TC contributors- all $USDC on Tornado Cash contracts @circlepay - @infura_io RPC- @AlchemyPlatform RPC- https://t.co/SHvgEjTOMV domain @eth_limo
Tornado.cash (@TornadoCash)
August 9, 2022Separate Case in the US
RomanStorm, another co-founder of Tornado Cash, was arrested in the United Stateslast year, while the third co-founder, Roman Semenov, remains a fugitive andfaces money laundering charges.
FinanceMagnates reportedin August 2023 that Storm had been charged in the US with assistingcriminals, including hackers linked to the North Korea-associated LazarusGroup, in laundering over $1 billion in illicit funds. The Federal Bureau of Investigation (FBI) arrested Storm in Washington.
The USDepartment of Justice charged Semenov with conspiracy to commit moneylaundering, sanctions violations, and operating an unlicensedmoney-transmitting business. According to the agency, the executives receivedcomplaints and calls from victims of cybercrimes. Still, they deliberately avoided implementing controls to prevent criminals from using the platform to launderillicitly obtained cryptocurrencies.
Separately,the Treasurys Office of Foreign Assets Control (OFAC) issued a sanctionsdesignation against Semenov, following a similar sanction placed on TornadoCash last year.
This article was written by Damian Chmiel at www.financemagnates.com.
World Crypto Global
