Originally published on: November 23, 2024
Alexey Pertsev, the mastermind behind the cryptocurrency mixing protocol Tornado Cash, will remain in pre-trial detention as he prepares for his upcoming trial. This decision has sparked concerns within the privacy-preserving technology developer community.
Pertsev took to X to express his disappointment with the court’s choice to extend his detention, citing the hindrance it poses to his appeal preparation. Despite operating a non-custodial cryptocurrency mixing protocol, Pertsev faces money laundering-related charges that have resulted in his extended detention.
The regulatory interest around Tornado Cash has been growing, with concerns raised by Democratic Party members of the United States House of Representatives. They questioned Treasury officials about the continued operation of the crypto-mixing service, Tornado Cash, which was initially sanctioned in 2022 but has remained active.
With a noticeable surge in mixer usage this year, Tornado Cash saw a 45% increase in deposits, reaching $1.8 billion in the first half of 2024. Despite not having control over the funds involved, Pertsev was found guilty of money laundering and sentenced to more than five years in prison by Dutch judges.
This legal battle serves as a cautionary tale for developers of privacy-preserving technologies. Moving forward, ensuring privacy features are compliant with the law will be crucial for the success of future privacy protocols, according to experts like Matthew Niemerg, co-founder and president of AlephZero.
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