Court extends jail term of Tornado Cash developer

A Dutch court has extended the incarceration of Alexey Pertsev, developer of the Ethereum-based crypto mixer Tornado Cash, by ninety days. This development manifested after Pertsev’s lawyers filed a bail application on Wednesday. The presiding judge dismissed the application and directed that the developer must remain in prison for another three months. 

Dutch authorities arrested Pertsev over his alleged involvement in money laundering activities. His arrest happened on August 10, two days after the United States Treasury Department imposed sanctions on Tornado cash. The crypto mixing platform was linked with  North Korean hackers and over $1 billion in dubious transactions. Treasury claims that Tornado Cash facilitated the pilfering of about $96 million stolen by hackers of Harmony Bridge. Also, the crypto mixer was used by hackers of Nomad to pilfer $7.8 million. 

Secretary to the Treasury Brian Nelson lamented that “despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors regularly and without basic measures to address its risks.”

He reaffirmed the commitment of the Treasury to “aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

However, Dutch authorities say they commenced an investigation into Tornado cash and its developer before the U.S Treasury. According to FIOD, an agency responsible for prosecuting financial crimes, it began the investigation on Tornado and Pertsev in June.

According to a statement issued by the Fiscal Information and Investigation Service, the developer is suspected of involvement in concealing criminal financial flows. Also, he allegedly facilitated money laundering by mixing crypto through the decentralized Ethereum mixing service Tornado Cash.

The Tornado cash developer was first arraigned before an examining judge on August 12. The Amsterdam-based developer was then slammed with a two weeks custody term. He was later re-arraigned on Wednesday in a closed-door hearing in Den Bosch. At the hearing, the presiding judge ordered that the trial be concluded in three months and that Pertsev remains in custody until then.

However, his arrest and incarceration in the Netherlands have been greeted with a series of controversies, particularly by actors within the crypto sphere. Some actors in the community see the sanctions on Tornado and the arrest of its developer as needless and questionable. They maintained that Torando cash has been hugely pivotal in aiding their privacies.

For instance, Coin Center protested the ban on Tornado Cash, stressing that it would challenge the decision in court. The crypto-oriented advocacy firm sees the ban as unconstitutional. Coin Center stated the Dutch authorities didn’t adequately review the impact of the sanction on Americans before embarking on it.

Kraken exchange CEO Josse Powell also questioned the legality of Pertsev’s arrest. He hinted that the ban on Tornado would not stand in a lower court.

Related

• GitHub removes Tornado Cash source code, researchers re-upload it
• Signatories to Tornado Cash community fund evacuate position
• Dutch authorities arrests suspected Tornado Cash developer