Last year, the developer of Tornado Cash (TORN) Alexey Pertsev was arrested in the Netherlands. Although he is now free, his lawsuit is still pending. He is accused of money laundering, but there is a positive turn in the case.
The Russian has received permission from the judge to question blockchain analysis company Chainalysis. He hopes to be able to prove this via on chain data that he is not guilty of money laundering.
The lawsuit against Pertsev and the investigation surrounding Tornado Cash’s privacy tool have significant implications for the crypto community. Privacy advocates are keeping a close eye on the proceedings.
The allegations
Russian-born Pertsev was arrested in August 2022 by the Dutch tax intelligence and investigation service. He is suspected of laundering money through Tornado Cash, an Ethereum (ETH)-based decentralized crypto mixer. Tornado Cash allows users to merge and mix their cryptocurrencies making their identity and transaction history untraceable. Alexey was born in April this year temporarily released.
What does the statement mean?
During the trial, the court gave Pertsev the opportunity to question Chainalysis. While the interrogation will be in writing, it presents a crucial opportunity for the Russian to challenge the validity and reliability of the data used against him.
Keith Cheng, Pertsev’s lawyer, has expressed his dissatisfaction with the FIOD’s arguments. Cheng points to “user agents,” entities that don’t exist on the Ethereum blockchain, raising questions about the veracity of the allegations. Chainalysis data contributed to the arrest. However, Chainalysis has not yet responded to the ruling.
Tornado Cash blacklisting
Complicating matters further was that Tornado Cash on the black list of the US Treasury Department’s Office of Foreign Assets Control (OFAC). US regulators allege that Tornado Cash has facilitated more than $7 billion in money laundering since its inception in 2019, pointing to the involvement of North Korean attackers and other malicious actors.
Recent governance attack
In another recently incident The Tornado Cash DAO recently suffered a setback when an evil proposal was accidentally voted on. The proposal contained code that went unnoticed until after the vote. The incident further highlights the challenges DAOs face and emphasizes the importance of due diligence in maintaining the integrity of open-source software.
