Tornado Cash Developer Alexey Pertsev’s Detention Prolonged

The detention of Alexey Pertsev, one of the developers behind Tornado Cash, an open-source on-chain privacy protocol, has been extended.

On Nov. 22, Pertsev tweeted that a Dutch court extended his pre-trial detention. Pertsev expressed disappointment with the court’s decision, asserting that the ruling impacts his ability to prepare an appeal.

“I am sad to announce that, despite our best efforts, the court decided to prolong my pre-trial detention,” Pertsev said. “This decision significantly complicates my ability to prepare for the appeal, but I remain determined to continue fighting for justice.”

Pertsev was arrested by Dutch authorities in Amsterdam on Aug. 10, 2022, just two days after the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) controversially sanctioned Tornado Cash.

Pertsev remained in custody for nine months before being released under house arrest on April 26, 2023. Pertsev was subject to house arrest until his trial one year later.

On May 14, a Dutch court found Pertsev guilty of money laundering, sentencing him to five years and four months in prison. The court said Tornado Cash was "intended for criminals" and determined that Pertsev "chose to look away from the abuse and did not take any responsibility."

Pertsev has been held in pre-trial detention since, with Dutch courts rejecting multiple bail requests, citing concerns that Pertsev could pose a potential flight risk in addition to the seriousness of the charges.

OFAC accused Tornado Cash of enabling the laundering of more than $1.2 billion worth of assets, including funds linked to the Lazarus Group, a hacking organization backed by the North Korean state.

Privacy advocates have characterized Tornado Cash as a decentralized smart contract enabling Ethereum users to access on-chain privacy. Tornado Cash’s documentation claims it does not comprise a mixer protocol as its “anonymity pools” do not “commingle” deposited funds.

Roman Storm could spend “several lifetimes” behind bars

Pertsev is not the only developer to face legal backlash for contributing to Tornado Cash.

On Aug. 23, 2022, the U.S. Department of Justice charged Roman Storm and Roman Semenov, two of Tornado Cash’s three founders, with money laundering and sanctions violations.

Storm was arrested in August 2023 at his home in Seattle and faces charges carrying a maximum potential sentence of 45 years in prison. However, during a Nov. 21 appearance on the Bankless Podcast, Storm said he could spend the rest of his life behind bars.

“The maximum prison time I’m facing should be 45 years, but it gets a lot more complicated than that,” Storm said. “I could be spending several lifetimes in prison if found guilty.”

Storm hopes to raise $2 million to fund his legal defense and will face trial in April 2025.

Semenov has not been arrested and remains at large. Semenov faces the same charges, suggesting a maximum sentence term of 45 years.

Tornado Cash volume grows

Despite OFAC barring U.S. citizens from interacting with Tornado Cash’s smart contracts more than two years ago, Tornado Cash has recently experienced an uptick in adoption.

Tornado Cash users moved $1.8 billion worth of assets through the protocol during the first half of 2024, marking a 45% increase year-over-year.

The increase in Tornado Cash activity attracted the attention of Democratic lawmakers, who sent a letter to the Treasury Department asking what actions the department is taking to address illicit finance through crypto mixers like Tornado Cash.

The lawmakers, including Reps. Sean Casten, Stephen Lynch, Brad Sherman, and Emanuel Cleaver, described mixers as posing “serious national security risks,” calling for secondary sanctions to be placed on non-U.S. entities interacting with Tornado Cash.