Financial Crime World

Dutch Court Sentences Tornado Cash Cofounder to Prison for Money Laundering Crimes Involving Billions in Cryptocurrency

Alexey Pertsev Sentenced to Five Years and Four Months in Prison

A Dutch court has handed down a sentence of five years and four months in prison to Alexey Pertsev, the co-founder of anonymizing cryptocurrency service Tornado Cash, following his conviction on money laundering charges.

Money Laundering Allegations Against Tornado Cash

  • Prosecutors allege that Tornado Cash, which conceals the origin of Ethereum transactions by allowing users to mix funds in common pools, had been involved in laundering over $1.2 billion worth of cryptocurrency.
  • At least 36 hacks were linked to Tornado Cash, including:
    • $600 million theft from Axie Infinity in March 2022
    • $275 million heist from crypto exchange Kucoin
  • Both hacks were attributed to North Korea’s Lazarus Group hackers.

Dutch Court’s Ruling

  • The Netherlands’ judgment comes several months after the U.S. Treasury Department sanctioned Tornado Cash, accusing it of having laundered over $7 billion since its inception in 2019.
  • The court found that Tornado Cash itself executed the concealing and disguising activities, making it culpable for money laundering.
  • The court ruled that Tornado Cash is not merely an instrument for users but actively suits criminal use.

Previous Developments in the Case

  • Co-founders Roman Storm and Roman Semenov have been indicted on money laundering charges in the United States.
  • Storm’s trial is scheduled to begin in the Southern District of New York in September.
  • Semenov remains at large.

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