Tornado Cash Dev’s Criminal Case in Europe May Hinge on Laptop Access
Dutch prosecutors investigating Tornado Cash developer Alexey Pertsev have recently gained access to his laptop, and are now using the data to probe key features of the case, like whether he personally profited from the privacy service.
An otherwise largely procedural hearing held Wednesday – which left Pertsev languishing in a Dutch jail as he awaits a full trial – revealed prosecutors are beginning to make inroads into a controversial case that has drawn criticism from the crypto community.
The Dutch government says Pertsev is guilty of money laundering for contributing to the privacy protocol, which the U.S. Office of Foreign Assets Control says has been used to process funds for the North Korean missile program. Pertsev denies those charges, and some worry the case effectively criminalizes writing open-source code.
But it appears that the government has yet to gain key evidence it would need to make its case, including whether Pertsev orchestrated Tornado’s development or profited from transactions.
After Dutch financial crime service FIOD succeed in unlocking Pertsev’s computer the previous Wednesday, “it is apparent from the first scan that the suspect still has wallets in various places and nodes,” public prosecutor Martine Boerlage said at the trial in ‘S-Hertogenbosch, The Netherlands.
It will become “clearer in the short term” whether Pertsev had acted as a relay in the network, Boerlage added, saying she also hoped for more information about the management of Peppersec, the cybersecurity company for which he served as board member.
Relays are an optional add-on to the Tornado Cash service, offering users an extra layer of privacy in exchange for a fee. Pertsev’s attorney Keith Cheng told CoinDesk that there’s no evidence he operated a relay.
The prosecution is hoping to make the case that, by steering proposals and votes relating to the decentralized autonomous organization that governed the protocol, Petsev and others played more than a passive role in Tornado operations.
The defense, meanwhile, wants to ensure the judges understand how decentralized anonymizing systems like Tornado work, and crucially how they differ from bitcoin mixers on which there is already case law.
A series of expert reports cited in court by Cheng set out that TORN tokens that govern the protocol can be purchased by anyone on the open market, and that a special add-on tool ensures Tornado can be fully compliant with the law – placing the liability solely on the user or receiver of funds.
“It is the person who wields the knife that is responsible for the good or bad outcomes,” Cheng said.
For Boerlage, Tornado’s compliance tool is neither here nor there – since it applies only after funds have been processed, while Pertsev is being accused of involvement in “layering,” the central step of money laundering which obfuscates the source of funds, she said.
The trial will continue on April 20.