Cryptocurrencies: developer sentenced to five years in prison for money laundering

The court did not believe the defense theory that Tornado Cash is “a legitimate privacy solution”. He sentenced the tool’s developer, Alexey Perstev, to five years and four months in prison, as well as the confiscation of his digital assets. He was accused of “accomplice to money laundering”, according to an unofficial translation of the law made available by specialized law firm ORWL. By offering Tornado Cash to the public, Alexey Prestev (31) was judged in the same way as if he had laundered money himself. However, he appealed against this decision of the District Court of East Brabant in the Netherlands on 14 May 2024.

Tornado Cash is a “mixer” or “mixer,” i.e., software that makes it possible to anonymize cryptocurrency transactions, in this case: “breaking the connection between the wallet address that sends the transaction and the destination address on the blockchain,” the judges said. Thus, the risk of money laundering was proven for the court: “The court found that it was foreseeable from the outset that criminal ether would be deposited into Tornado Cash due to its cloaking effect. »

Not really decentralized

Thus, it was also not sensitive to the argument that protocol management was “decentralized”, which was supposed to absolve developers of responsibility. Instead, she pointed out, only four people “retained substantial control” because they held 30% of the voting chips.

Lawyer William O’Rorke of ORWL believes so “The judges demonstrated a thorough understanding of the protocol” and that this judgment “offers an interesting insight into the court’s thinking about extremely technical DeFi projects”. Which perhaps foreshadows how European authorities will approach the subject with the implementation of the regulation on crypto-assets, MiCA, from 2025.

Leave a Comment