Tornado Cash Developer Sentenced to 64 Months in Landmark Privacy Protocol Case

In a landmark case, Tornado Cash developer Alexey Pertsev has been sentenced to 64 months in prison for his involvement in developing the Ethereum privacy tool. On May 14, a trio of Dutch judges found Pertsev guilty of aiding $2.2 billion in money laundering through the Ethereum-based crypto mixer.

Pertsev’s defense argued that it was unjust to hold developers liable for building smart contract protocols accessible to anyone, a stance echoed by many in the crypto industry. However, prosecutors countered, alleging that Pertsev failed to prevent criminal elements, such as North Korea’s Lazarus cybercriminal group, from exploiting the platform.

The judges sided with the prosecutors, asserting that Tornado Cash was intentionally built for illicit activity. They emphasized that technological ideology does not exempt individuals from the law.

Pertsev’s arrest in the Netherlands came shortly after the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash over money laundering and illicit finance allegations. Notably, one case cited by OFAC was the $600 million attack on Axis Infinity’s Ronin Bridge, the largest crypto hack to date. After eight months in jail, Pertsev was released and placed under house arrest.

The judges ruled that Pertsev’s initial eight-month incarceration would be deducted from his 64-month sentence, leaving him with four years and six months in prison. His lawyers have 14 days to appeal the verdict.

This case could set a precedent for how global judiciaries approach decentralized privacy protocols and cases involving crypto mixers. Other Tornado Cash developers, like Roman Storm and Roman Semenov, are facing legal challenges in different jurisdictions, including the U.S.

Authorities are also investigating platforms like Samourai Wallet as part of the Department of Justice (DOJ) and its Financial Crimes Enforcement Network (FinCEN) clampdown on crypto mixers. The lack of concise regulations in the U.S. regarding DeFi and digital assets makes such cases particularly contentious, with lawmakers and enforcement agencies differing on policy interpretation. Recently, a bipartisan duo of Senators questioned FinCEN over its crypto mixer lawsuits, highlighting the ongoing debate surrounding these entities’ classification as illegal money transmitters.