A Dutch court docket on Tuesday sentenced one of many co-founders of the now-sanctioned Twister Money cryptocurrency mixer service to five years and 4 months in jail.
Whereas the title of the defendant was redacted within the verdict, it is identified that Alexey Pertsev, a 31-year-old Russian nationwide, has been awaiting trial within the Netherlands on cash laundering fees.
Pertsev, one of many builders of Twister Money, was arrested in Amsterdam in August 2022 days after the U.S. Treasury Division sanctioned the service for permitting malicious actors such because the Lazarus Group to launder and money out their proceeds.
Along with the imprisonment, the defendant is predicted to forfeit cryptocurrency property price €1.9 million (~$2.05 million) and a Porsche automotive that had been beforehand seized.
“The defendant declared that it was never his intention to break the law or to facilitate criminal activities,” a abstract of the ruling mentioned. “With Tornado Cash, he wanted to offer a legitimate solution for a growing need for privacy in the crypto community. According to him it is up to the users not to abuse Tornado Cash.”
Nevertheless, the District Court docket of East Brabant disagreed, stating the operations of Twister Money have been totally the duty of its founders and that they didn’t combine ample mechanisms to forestall abuse.
“Tornado Cash does not pose any barrier for people with criminal assets who want to launder them,” the court docket added. “That is why the court regards the defendant guilty of the money laundering activities as charged.”
Twister Money functioned as a decentralized crypto mixer (aka tumbler), permitting customers to masks the blockchain transaction path by “mixing” illegally and legitimately obtained funds, making it a profitable possibility for adversaries trying to obscure the origin of the stolen cash.
It is also mentioned to have didn’t implement Know Your Buyer (KYC) or anti-money laundering (AML) applications as required by U.S. federal legislation. On prime of that, it was not registered with the U.S. Monetary Crimes Enforcement Community (FinCEN) as a money-transmitting entity.
A yr later, the U.S. Division of Justice indicted two of its different founders, Roman Storm, and Roman Semenov, charging them with conspiracy to commit cash laundering, conspiracy to commit sanctions violations, and conspiracy to function an unlicensed money-transmitting enterprise.
The case has sparked a debate, with privateness advocates arguing that anonymity instruments like Twister Money should not be criminalized, whereas the governments have taken a agency stance towards unregulated choices that may very well be exploited by unhealthy actors for illicit functions.
The Dutch court docket additional described Twister Money as combining “maximum anonymity and optimal concealment techniques” with out including provisions to “make identification, control or investigation possible.”
“Tornado Cash is not a legitimate tool that has unintentionally been abused by criminals,” it mentioned. “The defendant and his co-perpetrators developed the tool in such a manner that it automatically performs the concealment acts that are needed for money laundering.”
