Well, the Dutch court has done it. Alexey Pertsev, the 31-year-old Russian behind Tornado Cash, is now guilty of laundering a whopping $1.2 billion in dirty cryptocurrencies. This ruling is a full-on gut punch to the whole idea of privacy in crypto and DeFi.
During the trial, prosecutors had a field day pointing out how Pertsev supposedly turned a blind eye to criminals using Tornado Cash. Pertsev’s defense? He claimed that because Tornado Cash is open-source and automated, he couldn’t possibly control what people did with it. The court didn’t buy it. They basically said, “Nice try, but you’re still on the hook.”
What Is Tornado Cash?
Tornado Cash is a decentralized protocol meant to keep transaction histories under wraps. You know, fix the whole “everyone can see everything” problem with public blockchains. But the prosecutors weren’t having it. They argued that no matter how cool the tech is, it doesn’t get a free pass to help criminals hide their loot.
Public prosecutor Martine Boerlage hammered home that Tornado Cash, despite its claims of being leaderless, was run like a company. And boy, did it help some shady characters. The U.S. Office of Foreign Assets Control (OFAC) alleged that Tornado Cash laundered over $7 billion in stolen crypto. Among its biggest fans? The North Korean Lazarus Group.
Just to twist the knife a bit more, remember the Poloniex hack back in November 2023? Yeah, over $100 million in Ethereum (ETH-USD) got swiped. Despite Poloniex’s best efforts (including a $10 million bounty), they couldn’t get it back. Thanks to PeckShield’s detective work, we now know that $53.5 million of that stolen ETH went straight through Tornado Cash. The hacker funneled about 17,800 ETH through the mixer, making it a nightmare to trace.
A Dark Cloud Over Crypto Development
Pertsev’s conviction isn’t just bad news for him; it’s a thunderstorm over the whole idea of building privacy tools in crypto. The community has been rallying around Pertsev with petitions and fundraisers for his legal fees. But with this guilty verdict, the future looks bleak for anyone daring enough to develop similar tech.
Fellow Tornado Cash developer Roman Storm is facing his own legal battles in the U.S., with his trial coming up in September. If Pertsev’s case is anything to go by, things aren’t looking great for Storm either.
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