Alexey Pertsev, the developer behind Tornado Cash, is currently appealing a guilty verdict for money laundering in the s-Hertogenbosch court of appeal. The appeal process is expected to take several months, with uncertainty surrounding whether the appeal has been granted. Pertsev, who received a 64-month prison sentence, has the option to request home confinement while awaiting the appeal trial. Despite the appeal, he was immediately taken into custody to begin serving his sentence following the recent verdict. The court found Pertsev guilty of money laundering activities related to Tornado Cash, stating that it does not hinder individuals with criminal assets seeking to launder them.
Pertsev was detained in the Netherlands in August 2022 when Tornado Cash was blacklisted by the U.S. government. The U.S. Treasury accused Tornado Cash of being a critical tool for the North Korean hacking group known as Lazarus, linked to major crypto thefts including the $625 million hack of Axie Infinity’s Ronin Network. His peers, Roman Storm and Roman Semenov, who were also involved in developing the crypto mixer, are facing allegations of money laundering and sanctions violations in the United States. Storm is set to stand trial in September while Semenov has not yet been apprehended.
Storm was arrested last year after Tornado Cash was once again added to the U.S. sanctions watchlist. In March, Storm submitted a motion to dismiss the charges against him, claiming he did not operate a money laundering business and did not violate the International Emergency Economic Powers Act. However, the U.S. Department of Justice rejected the motion, stating that the service, announced in 2019 as a mixer, included a website, interface, smart contracts, and a network of “relayers.” The US Blockchain Integrity Act has been introduced by Democratic representatives to target cryptocurrency mixers, aiming to disrupt illicit funds’ flow and enforce transparency.
The proposed legislation prohibits financial institutions, cryptocurrency exchanges, and registered money service businesses from accepting funds processed through a mixer, with civil penalties of up to $100,000 for non-compliance. This initiative aligns with the U.S. government’s crackdown on crypto-mixing services, exemplified by the conviction of the founder of Bitcoin Fog, a $400 million crypto-mixing service, for money laundering. Roman Sterlingov was found guilty of various charges related to operating an unlicensed money-transmitting business. The US Treasury has also designated Tornado Cash on its Specially Designated Nationals list, effectively banning Americans from using the mixer.
