Alexey Pertsev, the developer behind Tornado Cash, has been found guilty of money laundering and has lodged an appeal with the s-Hertogenbosch court of appeal. The appeal process is expected to take several months, and it is uncertain whether the appeal has been granted. Pertsev, who received a 64-month prison sentence, can request home confinement while awaiting the appeal trial. Following the guilty verdict, he was taken into custody to start serving his sentence. The court found Pertsev guilty of money laundering activities associated with Tornado Cash, a crypto mixer that was blacklisted by the U.S. government.
Pertsev was detained in the Netherlands in August 2022 when Tornado Cash was accused of being a crucial tool for the North Korean hacking group Lazarus. Roman Storm and Roman Semenov, also involved in developing the crypto mixer, are facing allegations of money laundering and sanctions violations in the United States. Storm is set to stand trial in September, while Semenov has not yet been apprehended. Storm submitted a motion to dismiss charges against him, claiming that he did not operate a money laundering business and did not violate the International Emergency Economic Powers Act. The US Department of Justice rejected Storm’s motion, stating that Tornado Cash was a mixer service announced in 2019, comprising a website, user interface, smart contracts, and relayers.
In response to the crackdown on cryptocurrency mixers, U.S. Democratic representatives have introduced the US Blockchain Integrity Act to disrupt the flow of illicit funds and promote transparency. The proposed legislation prohibits financial institutions, cryptocurrency exchanges, and registered money service businesses from accepting funds processed through a mixer. Failure to comply could result in civil penalties of up to $100,000. This initiative aligns with the U.S. government’s efforts to combat money laundering activities associated with crypto-mixing services. Recently, the founder of Bitcoin Fog, a $400 million crypto-mixing service, was convicted of money laundering and related charges.
The U.S. Treasury has added Tornado Cash to its Specially Designated Nationals list, preventing Americans from using this mixer. The designation effectively bans U.S. individuals and entities from transacting with Tornado Cash. The crackdown on crypto mixers is part of a broader effort to tackle money laundering and illicit activities within the cryptocurrency industry. The US government has been actively pursuing individuals and services involved in facilitating money laundering through crypto platforms. These measures aim to enhance the integrity of the financial system and prevent financial crimes facilitated by innovative technologies like blockchain and cryptocurrencies.
