Alexey Pertsev will remain in pre-trial detention, a decision that has heightened concerns among privacy technology developers.
Pertsev, the developer of cryptocurrency mixing protocol Tornado Cash, will remain in custody while awaiting trial. In a post published on November 21, Pertsev expressed disappointment with the court’s decision to extend his detention, which he said had hampered his ability to prepare for his appeal.
Alexey Pertsev announced that pre-trial detention in X has been extended. Source: Alexey Pertsev
The decision comes in response to growing regulatory interest in Pertsev’s cryptocurrency mixing protocol.
On November 14, several Democratic lawmakers in the U.S. House of Representatives demanded answers from Treasury officials about what action is being taken against Tornado Cash, a cryptocurrency mixing service that was sanctioned in 2022 but remains active.
Lawmakers highlighted a “resurgence” in mixer use this year, with Tornado Cash accepting $1.8 billion in deposits in the first half of 2024, a 45% increase over all of 2023.
relevant: Tornado Cash developer Alexey Pertsev has been denied bail while he prepares his appeal.
Crackdown on Tornado Cache and Why It’s Important for Privacy
Pertsev was arrested on money laundering charges despite running a non-custodial cryptocurrency mixing protocol.
Pertsev was found guilty of money laundering by a Dutch judge at the s-Hertogenbosch Court of Appeal on May 14. The developer was sentenced to five years and four months in prison for laundering $1.2 billion worth of illegal assets on the platform.
Tornado Cash, a non-custodial cryptocurrency hybrid protocol, does not hold or control any funds.
Despite having no control over the funds, the developer was first jailed and then convicted in the Netherlands in August 2022, shortly after the US government blacklisted Tornado Cache.
At the March trial, Pertsev argued that he could not be held responsible for the actions of those who used the Tornado Cash protocol for nefarious or illegal purposes.
The court rejected these claims, saying Pertsev and Tornado Cash’s other co-founders would have taken additional steps to ensure security if they truly wanted to prevent criminals from abusing the protocol.
relevant: CryptoQuant CEO says mixing cryptocurrencies is ‘not a crime’
Pertsev’s legal battle raises serious concerns for privacy technology developers.
Providing privacy protections in a legally compliant manner is essential to future privacy protocols, according to Matthew Niemerg, co-founder and president of AlephZero.
Matthew Niemerg speaks with Cointelegraph. Source: Cointelegraph
magazine: Tornado Cash 2.0: A race to build a safe and legal coin mixer