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Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.
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‘S-HERTEGONBOSCH, THE NETHERLANDS – Alexey Pertsev, a developer of crypto privacy tool Tornado Cash will have to remain in jail after a Wednesday hearing in his trial on money laundering charges.
A panel of Dutch judges at the East Brabant Court agreed that the Russian web developer could flee or seek to hide evidence if freed on bail. Pertsev has denied the charges against him. His next hearing will take place in late April.
Pertsev was arrested in August last year, just days after the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the anonymizing tool for crypto transactions, which it says was used to fund North Korean hackers. Under the Dutch system of pre-trial detention, charges against Pertsev were not unveiled until a November court hearing.
Dutch public prosecutor Martine Boerlage alleged that, rather than merely publishing code, Pertsev and others ran Tornado like a business, comparing them to bank clerks accepting piles of suspicious cash without question.
Pertsev’s arrest has drawn protests from Edward Snowden and the local crypto community, while the OFAC sanctions have drawn criticism from privacy and crypto advocates.
Speaking to CoinDesk outside the courtroom, Pertsev’s lawyer Keith Cheng said the hearing had been a “good beginning” in educating the court about how decentralized finance works.
“We had the opportunity to explain what the basis is for Tornado Cash and, and why it is not money laundering,” Cheng said. “It is our opinion that the lack of knowledge is what’s keeping him here.”
“Of course I’m disappointed” that Pertsev won’t be released on bail, Cheng said “He will fight until the end to show what the importance is of decentralized options, software and open source code.”
UPDATE (Feb. 15, 2023, 17:15 UTC): Adds comments from Pertsev’s attorney.
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Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.
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Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.
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An Ethereum developer, known for his work on the privacy-focused Tornado Cash platform, will remain in a Dutch jail as his court case continues.
In mid-November, Dutch law enforcement arrested Ben Gemmell, an Ethereum developer, in connection with an investigation by the Netherlands Public Prosecution Service into an alleged money laundering scheme.
At the time of his arrest, Gemmell was working on the privacy-focused Tornado Cash project, which is an open source Ethereum-based wallet and decentralized application that enables users to transact securely and privately.
Under Dutch law, Gemmell was initially detained for 12 days while the investigation continued, but on the recommendation of the attorney general, the court has now extended the detention period pending a further hearing. In the meantime, Gemmell will remain in possession of the Dutch authorities.
This is not the first time that Gemmell has been arrested in connection with his work on Ethereum applications. In 2017, Gemmell was one of the people arrested after the Ethereum Frontier launch that saw the value of Ethereum dip dramatically.
Gemmell is not the only Ethereum developer involved in a legal case in the Netherlands. Two other Ethereum developers, Steven Nerayoff and Peter Vessenes, have also been charged with money laundering in relation to the Frontier launch.
Although the exact details of the case against Gemmell remain unclear, it is evident that the Dutch law enforcement is taking a serious stance on cryptocurrency-related investigations.
For the Ethereum community, the outcome of this case will be closely watched. If convicted, Gemmell may face a lengthy period of incarceration in the Netherlands as authorities continue to crack down on cryptocurrency-related crime.
