Blockchain & Cryptocurrency , Cryptocurrency Fraud , Fraud Management & Cybercrime

Tornado Cash Developer Sentenced to 5 Years in Prison

Pertsev Turned a Blind Eye to Illicit Activity on the Mixer, Dutch Court Says
Tornado Cash Developer Sentenced to 5 Years in Prison
Tornado Cash developer Alexey Pertsev received a Dutch prison sentence of more than five years. (Image: Shutterstock)

A Dutch court Tuesday handed Tornado Cash developer Alexey Pertsev a sentence of five years and four months for money laundering.

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The 31-year-old Russian national developed and maintained cryptocurrency anonymization software used to launder digital cash worth more than $2 billion, from July 2019 until his arrest in August 2022, the District Court of Oost-Brabant said.

The cryptomixer allows users to pool money into multiple wallets and withdraw from completely different accounts. The U.S. Department of the Treasury sanctioned the mixer in 2022 after finding that North Korean hackers washed more than $455 million through it.

Pertsev developed Tornado Cash with fellow Russian nationals Roman Storm and Roman Semenov. Storm recently filed a motion to dismiss his U.S. criminal case, and federal prosecutors argued against it. Both Storm and Semenov face similar criminal charges in the United States, including conspiracy to commit money laundering, conspiracy to violate the International Emergency Economic Powers Act and conspiracy to operate an unlicensed money-transmitting business. Semenov's whereabouts are unknown.

The Dutch court said hackers laundered Ether coins from at least 36 hacks worth $1.2 billion through Tornado Cash. "Because of the used parameters in selecting these hacks, 36 is the lower limit. Without using these parameters it becomes clear that $2.2 billion, proceeding from criminal Ether, have been laundered," it said.

The court dismissed Pertsev's defense that Tornado Cash offers legitimate, privacy-focused solution for crypto users. It said that Tornado Cash functioned exactly the way the defendant and his co-founders had developed it, and they were responsible for the lack of mechanisms to prevent its misuse.

"Tornado Cash does not pose any barrier for people with criminal assets who want to launder them. That is why the court regards the defendant guilty of the money laundering activities as charged," the court said.

The court said that Pertsev was aware of the illicit activity. He was part of chat groups that discussed hacking proceeds deposited into Tornado Cash and "behaved lazily when victims of hacks or investigative authorities reported to him."

The court accused him of creating a "shortcut for financing crimes and terrorism," accepting its foreseeable and evident use by criminals. "He continued the development and exploitation of Tornado Cash with blinders on. He chose to look away from the abuse and did not take any responsibility."

"Tornado Cash is not a legitimate tool that has unintentionally been abused by criminals, as the defendant presents. Tornado Cash suits criminal use. The user asks, Tornado Cash runs, without asking questions," the court said.

About the Author

Rashmi Ramesh

Rashmi Ramesh

Assistant Editor, Global News Desk, ISMG

Ramesh has seven years of experience writing and editing stories on finance, enterprise and consumer technology, and diversity and inclusion. She has previously worked at formerly News Corp-owned TechCircle, business daily The Economic Times and The New Indian Express.

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