• Dutch police arrested Tornado Cash developer Alexey Pertsev in Amsterdam
• Tornado Cash reportedly passed through at least $1 billion worth of cryptocurrencies of criminal origin
• Critics say both Pertsev’s detention and the US ban on Tornado Cash are wrong
Tornado Cash developer Alexey Pertsev is arrested in the Netherlands
As the Dutch authority FIOD announced in a public statement on August 12, a 29-year-old man was arrested in Amsterdam on August 10. “He is suspected of involvement in concealing criminal financial flows and facilitating money laundering through cryptocurrency shuffling via Ethereum decentralized shuffling service Tornado Cash,” the statement continued. The detainee is said to be Tornado Cash developer Alexey Pertsev. The code he created is said to have been used to channel large-scale flows of money from criminal activities such as crypto thefts and scams to other places. “This included funds stolen through hacks from a group believed to be linked to North Korea,” the FIOD explains.
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Since its launch, Tornado Cash has generated sales of at least $7 billion. According to the results of the investigation, however, cryptocurrencies of criminal origin worth at least one billion US dollars flowed through the mixer at the same time. The authority suspects that people behind this organization have made large profits from the illegal transactions. Alexey Pertsev appears to be such a person.
What happened at Tornado Cash?
As already mentioned, Tornado Cash is a so-called “mixing service for cryptocurrencies”. This enables its users to disguise the origin or destination of crypto transactions. It is therefore often used to increase the anonymity of the parties. Tornado Cash therefore describes itself as “a fully decentralized protocol for private transactions on Ethereum”. As such, Tornado Cash is not, in and of itself, illegal or criminal. However, the features of the mixing service have apparently been increasingly used by crypto thieves and scammers. This was noticed not only by the Dutch but also by the US authorities. The Office of Foreign Assets Control (OFAC) enforced a ban on Tornado Cash. According to BTC-Echo, this is a precedent. Instead of a natural person or a company, the authorities sanctioned the code of open source software for the first time. This was subsequently censored and operators were asked to freeze funds on sanctioned wallet addresses and to block transactions related to Tornado Cash.
Action against Tornado Cash and Alexey Pertsev cause protests
The actions of the authorities against Tornado Cash and the developer Alexey Pertsev are met with great outrage in the crypto scene. Critics see the mixing service’s code as neutral and perceive the ban as unlawful censorship. Many even argue that sanctioning source-only code violates freedom of expression and basic human rights. The questionable use of the protocol, on the other hand, does not legitimize the procedure. Rather, the criminal actors should be prosecuted. As BTC-Echo reports, crypto companies like Tether are also not supposed to obey the authorities’ requests to freeze certain funds and block transactions.
Critical voices have also been raised regarding the imprisonment of Alexey Pertsev. Matthew Green, a professor at Johns Hopkins University, accused the Dutch police of having no idea why they were actually holding Alexey Pertsev.
I have no idea what Alexey Pertsev did or didn’t do. It’s starting to look like the Dutch police don’t either. https://t.co/Jd1UfH4QPO
– Matthew Green (@matthew_d_green) August 24, 2022
Twitter user Ryan Adams wrote that “Alex” only wrote open source code, which constitutes a public good.
A judge just ruled that Alexey Pertsev must stay in jail.
Still no charges.
Alex wrote open source privacy code. A public good.
A few bad guys used his code so they put him in a cage.
Who’s next…vital? Tim Berners-Lee?
Disgraceful.
We need to get loud.
Free Alex!
– RYAN SΞAN ADAMS – rsa.eth ?? (@RyanSAdams) August 24, 2022
Just because “a few bad guys” used it would have put it in a cage. In his tweet he called for Pertsev’s release and said that one should raise one’s voice for it. In fact, over the weekend more than 50 people protested in Amsterdam for his release – so far without success.
Nicolas Flohr / Editor finanzen.net
Image sources: zapomicron / Shutterstock.com, TierneyMJ / Shutterstock.com