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

The cryptocurrency industry 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 reportedly been found guilty of laundering illegal funds through the platform.

Pertsev, a resident of the Netherlands, now faces up to 64 months in prison, according to a report by Crypto Potato. His lawyers have fourteen days to appeal the sentence. Pertsev, a Russian national, has been accused of laundering a total of $1.2 billion (roughly Rs. 18.37 billion).

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 connected to crypto wallets shrouded in secrecy.

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

In March of this year, during Pertsev's trial, prosecutors had blamed the developer for not doing enough to restrict crypto criminals from exploiting the Tornado Cash platform. In retaliation to these claims, Pertsev reportedly argued that users coming to the platform intentionally wanted to remain anonymous and that he should not be punished by others using a platform he developed.

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

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

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

By 2022, Tornado Cash had caught the attention of US authorities. The privacy mixer was reportedly accused of laundering illegal funds worth $7 billion (roughly Rs. 57,911 crore). The FBI even suspected that North Korean hackers had 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 against Tornado Cash in August 2022.