DEFIREGULATION

Dutch authorities prosecute Tornado Cash developers for laundering over $1.2 billion: members profit from scheme

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Dutch authorities prosecute Tornado Cash developers for laundering over $1.2 billion: members profit from scheme

According to a DLNews report, based on the indictment from Dutch prosecutors, authorities have accused Tornado Cash developer Alexey Pertsev of facilitating 36 illegal money laundering transactions through his platform, including a portion of the funds lost in the Ronin cross-chain bridge hack, which amounted to 175 ETH, currently valued at approximately $550,000.

Dutch Authorities Accuse Pertsev of Laundering Over $1.2 Billion

Dutch authorities have filed charges against Alexey Pertsev, the developer of Tornado Cash, as one of the accomplices, alleging habitual involvement in money laundering activities, having laundered over $1.2 billion in illicit funds through the platform:

At least $1.2 billion of criminal cryptocurrency has been circulated through Tornado Cash, with the team members profiting from these transactions.

The prosecution has also listed 36 details of transactions involving money laundering, with the largest sum of 175 ETH coming from the Ronin sidechain of Axie Infinity, which was hacked.

Reportedly, during that hack, Ronin lost 173,000 ETH and 22.5 million USDC, valued at nearly $600 million at the time.

Ronin Chain Hacked Over $600 Million, U.S. Treasury Confirms Involvement of North Korean Hacker Group Lazarus

Pertsev's Response: Prosecutors Fail to Specify Criminal Acts

Pertsev continues to assert that he has not violated any money laundering laws and has stated through his lawyer:

The prosecutors suspect Pertsev of money laundering, but they have described it in a vague manner without specifying the specific actions of his alleged crimes.

Previously, in August 2022, he was arrested in Amsterdam by the Fiscal Information and Investigation Service (FIOD) of the Netherlands and, after cooperation in investigations, was released under home confinement. He has been detained in the Netherlands for a year and a half.

The following year, other developers of Tornado Cash, Roman Storm and Roman Semonov, were also indicted by the U.S. Department of Justice, accusing them of indirectly assisting North Korea in developing nuclear weapons.

Co-Founder of Tornado Cash Arrested, U.S. DOJ: Indirectly Assisted North Korea in Developing Nuclear Weapons

It is reported that Pertsev will stand trial locally on March 26.

Cold Winter Effect Brewing

The ongoing scrutiny of the Tornado regulatory case is of significant interest, as its outcome could have a major impact on the cryptocurrency industry and may set a precedent for law enforcement in determining the legality of developer products.

Founder of Bitcoin Mixing Protocol Bitcoin Fog Convicted of Money Laundering, Will Tornado Cash Case be Handled Similarly?

Cryptocurrency advocates, led by Coinbase CEO Brian Armstrong, several blockchain associations, and DeFi foundations, have protested vehemently against the U.S. authorities' repeated sanctions against Tornado Cash, sparking discussions on coding freedom.

Tornado Cash is merely a tool, and the development software itself should not be considered as participating in money laundering or other criminal activities.

In response, Dutch prosecutors stated:

The mixing service itself is not illegal, and writing code will not be punished, but if one participates in mixing criminal assets or concealing the source of criminal funds, they should be penalized.