2025-02-08
In May 2024, the 's-Hertogenbosch Court
of Appeal in the Netherlands convicted Alexey Pertsev, the developer of the
Tornado Cash protocol, of money laundering and sentenced him to five years and
four months in prison.
The court determined that Pertsev and
his co-developers should have implemented more stringent measures to prevent
the misuse of Tornado Cash by criminals.
Despite the developers' lack of direct
control over the protocol or the funds passing through it, the court held them
accountable for facilitating illicit activities.
This decision has raised concerns among
privacy advocates and the open-source software community, who argue that
prosecuting developers for the actions of users sets a concerning precedent.
On November 26, 2024, the U.S. Court of
Appeals for the Fifth Circuit overturned sanctions imposed by the U.S.
Treasury's Office of Foreign Assets Control (OFAC) against Tornado Cash.
The court ruled that OFAC had exceeded
its authority, stating that the immutable smart contracts of Tornado Cash do
not qualify as "property" under federal law.
Following this, Alexey Pertsev, a
developer of the cryptocurrency mixer Tornado Cash, was released from prison
custody on February 7, 2025.
He will remain under house arrest with
electronic monitoring as he prepares to appeal his May 2024 conviction for
money laundering, for which he was sentenced to five years and four months in
prison.
Pertsev's case has been a focal point
in discussions about the legal responsibilities of open-source developers and
the use of privacy-enhancing technologies in the cryptocurrency space.
