DeFi
Tornado Cash developer Alexey Pertsev denied bail to appeal money laundering conviction – DL News
- Tornado Cash developer Alexey Pertsev will remain in prison, a Dutch court has ruled.
- He has spent the last two months in prison after being convicted of laundering $2.2 billion.
- Pertsev appealed his conviction.
- The court and prison will not allow Pertsev to access a computer, the Internet and data, his lawyer said.
A Dutch court on Friday refused to release Alexey Pertsev, the Tornado Cash developer convicted of money laundering in May, while he prepares his appeal.
The appeals court in ‘s-Hertogenbosch in the Netherlands ruled that Pertsev would remain in custody, a spokesman said. DL News.
His lawyers, Keith Cheng and Judith de Boer, argued that Pertsev was not a flight risk and needed access to a computer and the internet to prepare for his appeal trial.
“The court considers that his continued detention does not prevent him from preparing his defense,” Cheng said. DL News.
But lawyers disagree.
“In a case involving such fundamental legal issues, pre-trial detention is unacceptable,” Mr de Boer said.
“This unprecedented case shows under what circumstances a software developer can be held criminally liable for misuse by a third party,” she added. That is why Pertsev should be free to wait and prepare for the appeal – “which will benefit the entire legal system.”
Digital installations rejected
At a hearing last month, Cheng said he presented 18 points of preparation for his appeal where Pertsev would need access to a computer, as required by the court to make the request.
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However, Pertsev’s request for release was rejected, to Cheng’s surprise. He had already filed a request with the prison where Pertsev is being held, which was also rejected.
“I have made a request to the prison director for digital facilities, which include having a good computer, unlimited internet access, using specialized software and having external data media,” Cheng said.
But the computer and facilities could not be granted because it goes against the prison’s security rules, the defense lawyer explained. He presented the prison’s refusal to the court, but without success, he said.
For a case that revolves around the technical aspects of DeFi in terms of smart contracts, relays and protocol governance, Pertsev is a crucial source of knowledge.
“This kind of preparation cannot be done by a lawyer,” Cheng said. “We need [Pertsev] because he has laid the foundations on the technical aspects of his case and he knows how to explain certain things.
Cheng before note that Pertsev’s detention violates the European Convention on Human Rights, which outlines the rights of everyone to a fair trial.
The verdict
On May 14, a Dutch court of three judges sentenced The 31-year-old Russian national was sentenced to 64 months in prison, or more than five years, for laundering $2.2 billion in stolen and hacked cryptocurrencies through the cryptocurrency mixer Tornado Cash.
The judges accepted the prosecution’s argument that Pertsev and his co-developers failed to prevent criminals, such as North Korean hackers Lazarus Group, from laundering illicit proceeds through the platform.
Tornado Cash is an open-source protocol that ensures the privacy of otherwise transparent transaction records on the Ethereum network by hiding transaction histories. It runs on automated smart contracts.
Pertsev was arrested in August 2022, days after the U.S. Treasury imposed sanctions on Tornado Cash. Pertsev was taken into custody and prosecutors unsealed his money laundering charges three months later.
Cryptocurrency industry experts say the developer’s arrest has created a chilling effect within the open source community. Developers fear being held accountable for how others use their software, especially when it comes to developing digital privacy tools.
Pertsev spent eight months in prison before being released under house arrest last year. He was eventually released on parole.
Today, his lawyers say Pertsev will pose no greater flight risk than before.
The trial
At his trial in March, Pertsev argued He added that he could not be held responsible for the crimes committed by others who abused the Tornado Cash platform. He also said that since the protocol is automated and open source, no one can stop it.
The judges were not convinced. In their verdict in May, they said that if the developers wanted to prevent crime, they should have included it in the protocol.
Roman Storm, also the developer of Tornado Cash, will go on trial in the United States in September. He is charged with money laundering, conspiracy to operate an unlicensed money transmission service and conspiracy to violate U.S. sanctions laws.
Inbar Preiss is a regulatory correspondent at New DL. Email the author at inbar@dlnews.com.
Updated July 12 to reflect comments from Pertsev’s attorneys, Keith Cheng and Judith de Boer.