Developer of Bitcoin Mixer Service Tornado Cash Sentenced to 64 Months in Prison Despite Being Open-Source

Tornado Cash, a once well-known Bitcoin mixer service, allowed users to transfer their cryptocurrency assets, especially Bitcoin, to the platform, which would then conduct multiple transactions and send the assets to new addresses. This method helped improve Bitcoin's privacy and security, but it was not thorough enough, as the entire blockchain could still be traced. However, if all users' assets were mixed together, it would be impossible to accurately distinguish them.

The developer of the platform, Russian citizen Alexey Pertsev, was sentenced to 64 months in prison despite the platform being open-source. The Dutch court found that Pertsev and his team members still had control over the platform, and therefore, they could not shirk all responsibility just because the software was open-source.

The incident began on August 8, 2022, when the US announced sanctions against Tornado Cash, making it illegal for any US citizen or entity to use the platform. The reason for the sanctions was that the US discovered that multiple hackers and fraud groups were using the platform to launder illegally obtained funds, avoiding law enforcement tracking.

Two days later, Pertsev was arrested in the Netherlands and has been detained by Dutch authorities while awaiting trial. Recently, the Dutch court announced that Pertsev had laundered over $12 billion and sentenced him to 64 months in prison.

Knowing about the money laundering but not intervening:

The Dutch prosecutor claimed that Pertsev was well aware of the illegal money laundering activities on the platform, with statistics showing that over 30% of the platform's activities from 2019 to 2022 involved money laundering. However, Pertsev did not intervene.

Using a mixer to launder money requires paying a significant fee, and most users do so for privacy reasons. However, a significant portion of hackers also use this method to launder money, such as the notorious Lazarus Group.

The defense lawyer argued that Tornado Cash operated on the Ethereum blockchain and was open-source, and Pertsev could not decide how users interacted with the platform through the Ethereum blockchain. Therefore, he should not be held responsible for any illegal activities conducted by users.

However, the prosecutor strongly opposed this argument, citing that Pertsev and his team members had control over the platform, including adding features to the interface that allowed legitimate users to separate their funds from those of marked hackers. The prosecutor believed that Pertsev's actions were too late, and a large amount of money had already been laundered through the platform.

In the end, the Dutch prosecutor requested a 64-month prison sentence for Pertsev, which the court agreed to. The Dutch court also released a statement responding to the incident: Alexey Pertsev used the guise of privacy to ignore legal regulations, and Tornado Cash was not a legitimate tool that was being misused by criminals, but rather a tool suitable for criminal use.

As an aside, after Tornado Cash was sanctioned, GitHub banned the project and also banned all developers who had submitted code to the project. Wasn't that absurd.