Last Updated on November 23, 2022 by Bitfinsider
Pertsev has been held in custody since August, just days after the U.S. Treasury invoked sanction authorities to target the Tornado protocol, which it claimed was used to enable North Korean hackers and launder over a billion dollars’ worth of cryptocurrency.
Indictments for money laundering were first made public by Dutch public prosecutor Martine Boerlage at the hearing on Tuesday. Boerlage had only issued a news release regarding the matter before accusing Pertsev of assisting the processing of illegal funds by creating the Tornado Cash code.
Boerlage dismissed Pertsev’s claims that Tornado Cash was a decentralized protocol that he had no control over, asserting that it was actually the same as PepperSec, the organization he worked for along with Roman Semenov and Roman Storm.
Pertsev’s attorney, Keith Cheng, expressed that he was “extremely upset” with the verdict outside of the courtroom.
“It’s clear to us that these judges are not as familiar with the subject matter as they should be,” the attorney said. “At the moment, the case law regarding criminal activities is all about bitcoin mixers… It’s very important that the court understands that Tornado Cash is something different.”
Widespread outrage has been generated by Pertsev’s arrest and detention, including demonstrations in Amsterdam and a tweet from American Edward Snowden, who now resides in Russia after leaking documents from the National Security Agency. Snowden compared Pertsev’s treatment to the “kid gloves” given to executives at the defunct crypto exchange FTX.
Reasons behind verdict
Boerlage said that the evidence presented was very straightforward in terms of money laundering, citing regulations that prohibit hiding the source and flow of cash. “That’s exactly what a mixing service like Tornado Cash does for you,’ she said. “If you as a bank don’t know where the money is coming from and haven’t yet built in any mechanism to look at that, then there’s a considerable likelihood that your service is laundering money,” she further added.
Boerlage refuted assertions that the program operated independently and asserted that Pertsev and others held de facto authority.
The prosecutor claimed that Pertsev “has nothing to do with Tornado Cash, can be relegated to the realm of fantasy. According to Boerlage, Pertsev, Semenov, and Storm may have owned so many tokens for the protocol that they effectively “always outvoted everyone else” when it came to voting.
When the three discussed using Twitter to get around money-laundering rules, she said that private conversations between them revealed that they actually made operational decisions regarding the protocol and had effectively admitted they were engaged in “shady stuff.”
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