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The verdict is expected to create a "chilling effect" on privacy-focused open-source development.
A Dutch court at ‘s-Hertogenbosch has convicted Alexey Pertsev, a 31-year-old Russian national and developer of the crypto mixing platform Tornado Cash, of laundering $1.2 billion in illicit assets.
The three-judge panel is expected to sentence Pertsev on Tuesday, and his lawyers will have 14 days to appeal the decision.
The verdict is set to have a significant impact on the future of privacy in decentralized finance, as experts believe it will create a “chilling effect” on the development of open-source software that provides users with financial privacy tools.
During the trial in March, prosecutors argued that Pertsev did not do enough to prevent criminals from using Tornado Cash, while the defense countered that the open-source and automated nature of the smart contracts at the heart of the platform meant Pertsev could not be held accountable for the actions of anonymous and independent users.
Tornado Cash is a decentralized protocol designed to obfuscate transaction histories on the Ethereum blockchain, providing a solution to the inherent privacy issues of publicly visible and immutable records.
Despite this definition, however, prosecutors rejected the idea that the technological concepts outweighed legal obligations to prevent platforms from aiding criminals and sanctioned entities, such as North Korean cybercrime groups, in concealing the origins of stolen assets.
Public prosecutor Martine Boerlage argued that Tornado Cash was run like a company, despite claims that it operated without leadership.
The platform has been used to launder crypto from hacks and heists worth over $7 billion, according to the US Office of Foreign Assets Control, with the North Korean cybercrime organization Lazarus Group being a key abuser of the protocol.
The crypto industry has shown support for Pertsev through advocacy efforts, petitions, and attempts to cover his legal fees. Fellow Tornado Cash developer Roman Storm is facing similar charges in the US, with his trial scheduled for September 23. Experts speculate that Pertsev’s guilty verdict may foreshadow Storm’s fate.
Note: This story is developing and will be updated with statements from involved parties.
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