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TORN Rises 15% on News of Alexey Pertsev’s Imminent Release

3 mins
Updated by Michael Washburn
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In Brief

  • Dutch authorities have announced the release of Alexey Pertsev next week.
  • The Tornado Cash founder has been in prison since August 2022, and his release has caused TORN to surge.
  • What will his legal strategy be and what does this mean for similar apps?
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News broke today that Alexey Pertsev, the developer of the Tornado Cash app, will soon be a free man following his detention in the Netherlands since August 2022. In response, the token TORN has surged, though the app is still banned in many countries.

This news rekindles debate around Tornado Cash, an app that has been used for good and to commit crimes. Will the courts rule in Pertsev’s favor? Or is he on the road to the same fate as Silk Road founder Ross Ulbricht?

The Case Against Tornado Cash

Tornado Cash is an application that allows users to input crypto and receive an equal amount of different assets. Because blockchain builds on a transparent ledger, people can follow a person’s transactions. Through the app, users can maintain a level of privacy in how they use their funds. This can be extremely important when it comes to high-profile actors and how they use their wealth.

Back in August 2022, Dutch authorities arrested Alexey Pertsev. The US Treasury Department had recently sanctioned Tornado Cash alleging that hackers used the app to launder cash. Specifically, they alleged that criminals laundered over $7 billion worth of cryptocurrency since 2019. The criminals allegedly attacked the stablecoin protocol Beanstalk Farms in 2022 and stole $80 million from that victim alone.

Because Tornado Cash scrambles up the assets, it becomes difficult to follow the money trail. Thus, stolen funds can be lost in the disarray.

Other Uses of Tornado Cash

Many people and organizations have used Tornado cash and similar apps to launder money, including North Korean hackers who stole money earlier this year. However, Tornado Cash has been used for legitimate ends as well. Famously, Ethereum founder Vitalik Buterin used Tornado Cash to send funds to Ukraine anonymously.

In response to the original case, Coinbase sponsored a lawsuit against Treasury. They argued that Tornado Cash had been used to make donations to Ukraine and to safeguard sensitive information like salaries.

Tornado cash, Coinbase

Charges Against Alexey Pertsev

In a statement, the Dutch Ministry of Finance said it suspects Alexey Pertsev’s involvement in “concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralized Ethereum mixing service Tornado Cash.”

It is important to note that there have been no formal charges. However, in the Netherlands, authorities have the right to detain individuals for up to 110 days. And they can do this without the need for formal charges if they label someone a flight risk.

The Song Remains the Same

Back in 2015, Ross Ulbricht was sentenced to life in prison following the shutdown of the dark web trading platform, Silk Road. The charges were for facilitating the sale of over $200 million worth of illegal drugs and other illicit goods.

But interestingly enough, another pioneer in tech has been able to avoid similar charges. Mark Zuckerberg, the founder of Facebook (now Meta), has faced challenges over misinformation and confirmation bias that spreads on the platform. He has argued that what people write on his platform is not his responsibility. He famously added that “it’s mainly your fault, not theirs” that you click on things you already agree with.

The conflict of the last few years has been about whether creators should be penalized for the actions that take place on the platforms they create. However, the reactions from the legal system have not been equal.

Zuckerberg can avoid charges based on the argument that he can’t control what people do on Facebook. Why couldn’t Ulbricht and Pertsev do the same?

Pertsev’s Defense

“We are ecstatic that he can be set free,” Pertsev’s lawyer Keith Cheng told CoinDesk. Pertsev will “now work even harder and better on his defense,” which raises “important issues about privacy on Ethereum.”

The next investigation hearing will be held on May 24. Until then, we will be watching the case, and the price of TORN, very closely.

Top crypto platforms in the US | February 2024

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Virginia Valenzuela
An award-winning arts writer with expertise in crypto journalism, web3 marketing, and community development, Virginia Valenzuela boasts over 6 years of experience managing editorial teams and contributors. With a keen eye for refining content strategies, she has successfully developed and executed storytelling and thought leadership. Her work consistently encourages curiosity and engagement across various platforms. A sought-after speaker at numerous NFT conferences, Virginia regularly...
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