Tornado Cash developer pleads guilty to money laundering.
Alexey Persev, the developer of the cryptocurrency mixing protocol TornadoCash, has been found guilty of money laundering, which has a major impact on open source code developers.
Percev had the money transferred by a Dutch judge at the s-Hertogenbosch Court of Appeal on May 14. The developer was sentenced to five years and four months in prison for defrauding the platform of illegal assets worth $1.2 billion.
The fine comes despite the fact that Tornado Cash is a non-custodial crypto hybrid protocol – meaning that funds passing through the protocol are never captured or monitored.
Despite having no control over the funds, Tornado Cash was found guilty shortly after being blacklisted by the United States government after its developer was arrested in the Netherlands in August 2022.
Percev's legal representatives will have 14 days to appeal the court's decision.
Related: Crypto-mixing ‘not a crime,' says CryptoQuant CEO
Privacy-focused protocols under control
According to the previous indictment, Percev should have suspected the illegal origin of some of the transactions on its co-hosted platform.
Currently, there is no evidence that Percev is actively involved in any criminal transactions, other than contributing open source code to the crypto hashing protocol.
The ongoing case has caused widespread concern among open source code developers, as it could become an example of how criminals use code to punish developers.
During Percev's previous trial in March, prosecutors argued that the developer did not create adequate safeguards to prevent money laundering.
Among the criminals using the protocol were notorious hackers such as the North Korean state-backed Lazar Group, officials said.
The Lazarus Group is suspected of being behind the record $625 million hack on the AXE Infinity Ronin Bridge in March 2022.
Since its launch in 2019, Lazarus has laundered more than $455 million in stolen funds through Tornado Cash, facilitating more than $7 billion in crypto fraud, according to the US Treasury's Office of Foreign Assets Control.
Perseve's fine comes weeks after the founders of Zamora Wallet were arrested. On April 24, Cointelegraph reported that Samourai Wallet CEO Keonne Rodriguez and Chief Technology Officer William Hill each face one count of money laundering and one count of conspiracy to conduct an unauthorized money transfer business.
The United States' stance on crypto mixer Tornado Cash shows a clear “disdain for privacy,” said Amanda Tuminelli, head of legal affairs at the DeFi Education Fund.
RELATED: DOJ Rejects Tornado Cash Co-Founder's Motion to Dismiss Charges
