Tornado Cash developer sentenced to 64 months in prison on charges of laundering $1.2 billion: Report

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, who received a four-month sentence earlier this month for the exchange’s anti-money laundering activities. Now Alexey Pertsev, the developer of the controversial crypto mixer Tornado Cash, has been found guilty of laundering illegal funds through the platform.

According to a report from Crypto potato, Pertsev, a resident of the Netherlands, now faces 64 months in prison. His lawyers have fourteen days to appeal the sentence. Pertsev, a Russian national, is accused of laundering a total of $1.2 billion (approximately Rs 18,370 crore).

Crypto mixers like Tordano Cash allow people to deposit crypto tokens into a common pool of cryptocurrencies. From this common pool, these deposited crypto tokens can be linked into crypto wallets shrouded in secrecy.

Since its launch in 2019, Tornado Cash has found popularity among crypto hackers, fraudsters and thieves. In several cases, crypto criminals have used Tornado Cash to move illicit funds without leaving a trail for authorities to trace.

In March of this year, during Pertsev’s trial, prosecutors accused the developer of not doing enough to limit crypto criminals from exploiting the Tornado Cash platform. Responding to these claims, Pertsev claims that users coming to the platform intentionally want to remain anonymous and that he should not be penalized for others using a platform he developed.

Many in the crypto community have spoken out in Pertsev’s defense. One of them is Raphael Bloch, co-founder of The Big Whale publication. In a tweet published on May 14, Blok said: “This decision is very dangerous because Pertsev only developed an open source tool. Condemning it is like condemning a manufacturer of knives or cars whose consumers would behave in the wrong way.

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

Many reacted to the development, calling it an example of centralized systems addressing the financial independence and privacy that the crypto sector offers.

In 2022, Tornado Cash caught the attention of US authorities. The privacy faucet was reportedly charged for laundering illicit funds worth $7 billion (approximately Rs. 57,911 crore). The FBI even suspects that North Korean hackers used Tornado Cash to abscond with stolen cryptocurrencies worth $455 million (roughly Rs. 3,763 crore).

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