Crypto: 5 years in prison for developing an application!

Digital privacy advocates are dismayed. Alexey Pertsev, the developer behind the Tornado Cash protocol, has just been sentenced to a very heavy prison term in the Netherlands. His crime? Creating a tool theoretically aimed at improving the privacy of crypto transactions, but accused of facilitating a massive laundering of dirty money.

A conviction for money laundering!

The pill is anything but easy to swallow for the crypto community. A panel of three Dutch judges has sentenced Alexey Pertsev to the astronomical sentence of 5 years and 4 months in prison. The reason? Allowing the laundering of $1.2 billion in illicit assets according to the accusation, via the Tornado Cash transaction mixing protocol.

A sanction of rare severity when you consider that this application is non-custodial, meaning it has no control over the funds that transit through it. The judges held Pertsev responsible for the malicious uses by third parties of his open-source code, an approach to say the least controversial.

The verdict hits the Russian developer hard, who was arrested in August 2022 following the blacklist of Tornado Cash by the United States. His team has 14 days to appeal.

Controversy over the responsibility of crypto developers

Beyond Pertsev’s fate, it is the entire community of decentralized application creators who find themselves threatened. This decision could create a dangerous precedent by criminalizing any code deemed vulnerable to illicit activities in advance.

Thus, the judges considered that the crypto developer should have foreseen anti-laundering safeguards on Tornado Cash. But can we really demand that a developer restrict in advance the freedom of their own open-source code?

Prosecutors also cited the proven use of the protocol by cybercriminals such as Lazarus. A justification that is contested: should we then censor all privacy tools on the grounds that they might be misused?

The heavy conviction of Alexey Pertsev for allegedly laundering through Tornado Cash risks opening a real Pandora’s box. By setting such a controversial precedent, the judiciary seems keen to erect strict safeguards against crypto anonymization tools. A paradoxical stance considering the democratic virtues of cryptography for preserving fundamental freedoms.