Dutch Court Sentences Tornado Cash Co-Founder to 5 Years for Money Laundering

Dutch Court Sentences Tornado Cash Co-Founder to 5 Years for Laundering $1.2 Billion in Cybercriminal Proceeds

A Dutch court ruling on Tuesday found Alexey Pertsev, one of the co-founders of the now-sanctioned Tornado Cash cryptocurrency mixer service, guilty of laundering $1.2 billion in illicit cybercriminal proceeds. The 31-year-old Russian national was sentenced to 5 years and 4 months in prison for his role in facilitating malicious actors like the Lazarus Group in laundering their illegal earnings from cybercrime activities.

Pertsev, the developer of Tornado Cash, was arrested in Amsterdam in August 2022, just days after the U.S. Treasury Department sanctioned the service. He maintained that his intention was to offer a legitimate solution to the crypto community seeking privacy and argued that users were responsible for any abuse of the service.

However, the District Court of East Brabant disagreed, stating that the responsibility for Tornado Cash’s operations lay with its founders and that the service lacked mechanisms to prevent abuse. The court highlighted that Tornado Cash allowed criminals to launder their assets without any barriers, making Pertsev guilty of money laundering activities as charged.

Tornado Cash, a decentralized cryptocurrency mixer, allowed users to obscure the transaction trail by mixing illegally and legitimately obtained funds. It laundered $1.2 billion worth of cryptocurrency stolen through at least 36 hacks, including the Axie Infinity hack by North Korea’s Lazarus Group hackers.

In addition to the prison term, Pertsev was ordered to forfeit cryptocurrency assets valued at €1.9 million and a Porsche car seized earlier. The case has also brought attention to the trials of the other co-founders, Roman Storm and Roman Semenov, who face charges related to money laundering and operating an unlicensed money-transmitting business.

The debate surrounding the criminalization of anonymity tools like Tornado Cash continues, with privacy advocates arguing for user rights to avoid financial surveillance, while governments emphasize the need to regulate offerings susceptible to exploitation by bad actors for illicit purposes.