Tornado Cash Developer Sentenced to 64 Months in Prison on Charges of Laundering $1.2 Billion: Report

May15,2024



The cryptocurrency sector and crypto entrepreneurs have often come under legal scrutiny in recent years. Former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison in March on fraud charges, followed by Binance founder Changpeng earlier this month for four months in prison for the exchange's anti-money laundering activities. Was found. Now, Alexey Pertsev, the developer of controversial crypto mixer Tornado Cash, has reportedly been found guilty of illegal funding through the platform.

According to a report by Crypto Potato, Pertsev, a resident of the Netherlands, will now face 64 months in prison. His lawyers have fourteen days to appeal the decision. Russian national Pertsev has been accused of laundering a total of $1.2 billion (approximately Rs 18,370 crore).

Crypto mixers like Tordano Cash let people deposit crypto tokens into a common pool of cryptocurrencies. From this common pool, these pooled crypto tokens can be added to a privacy-surrounded crypto wallet.

Since its launch in 2019, Tornado Cash has gained popularity among crypto hackers, scammers, and thieves. In many instances, crypto criminals have used Tornado Cash to move illicit funds without leaving any trace for authorities to trace.

In March this year, during Pertsev's trial, prosecutors had faulted the developer for not taking adequate steps to prevent crypto criminals from exploiting the Tornado Cash platform. Countering these claims, Pertsev had reportedly argued that users visiting the platform intentionally wanted to remain anonymous and should not be penalized for other people using the platform he developed.

Many in the crypto community have spoken out in defense of Pertsev. One of them is Raphael Bloch, co-founder of 'The Big Whale' publication. In a tweet published on May 14, Bloch said, “This decision is very dangerous because Pertsev has only developed an open-source tool. Condemning it is like condemning a knife or car manufacturer whose users may have behaved unfairly.

Crypto influencer Ryan Sean Adams, who has over 240,000 followers on X, called Pertsev's conviction the death of privacy in the European Union (EU).

Many have reacted to the development, calling it an example of centralized systems cracking down on the financial freedom and privacy provided by the crypto sector.

Tornado cache in 2022 caught the attention of US authorities. Privacy Mixer was reportedly accused of laundering $7 billion (approximately Rs 57,911 crore) in illegal money. The FBI also suspected that North Korean hackers used Tornado Cash to steal $455 million (roughly Rs. 3,763 crores) of stolen cryptocurrency.

The US Office of Foreign Assets Control (OFAC) imposed sanctions against Tornado Cash in August 2022.


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