- Pertsev's lawyer tells DL News US ruling in Tornado Cash case is 'relevant' to his own appeal.
- Crypto mixer dev was convicted by a Dutch court in March of money laundering.
- The two cases will reshape crypto privacy rights.
Alexey Pertsev just got some help from an unlikely source.
One day after a US court ruled in favour of Tornado Cash users, a lawyer for Pertsev, the dev imprisoned in the Netherlands for his role at the crypto mixer, said she will consider using sections of the opinion to help appeal his conviction for money laundering.
“Some of the aspects that have been dealt with in this court are relevant for the Dutch case as well,” Judith de Boer, Pertsev’s appeals lawyer, told DL News on Wednesday.
She added that the decision demonstrates the importance of onchain privacy for legitimate users, she said.
Dirty money
Pertsev, a Russian national and resident in the Netherlands, is serving a five-year sentence after a Dutch court found he bore criminal responsibility for not preventing North Korean hackers and other bad actors from using Tornado Cash to launder more than $1.2 billion in dirty money.
On Tuesday, a US appellate court found that smart contracts, the Ethereum-based software programmes used to anonymise crypto transactions on Tornado Cash, should not be subject to a law designed to protect national security.
In reversing a lower court decision, the three-judge panel ordered it to grant Tornado Cash users “partial summary judgment” that would effectively undo the sanctions on the crypto mixer.
Now de Boer is hopeful the US judges’ reasoning will resonate with their Dutch counterparts as they consider Pertsev’s appeal.
“The user is the only one who can trigger the smart contract transaction,” de Boer said. “The transaction is made without the knowledge and consent of the recipient.”
Immutable software
Naturally, a US appellate court ruling doesn’t have standing in the Netherlands. Moreover, the US case is a civil lawsuit and not a criminal prosecution.
Still, defining who exactly is responsible for illicit transactions on immutable, open-source software lies at the core of both cases.
In 2022, the US Treasury Department’s Office of Foreign Assets Control, or OFAC, sanctioned Tornado Cash for facilitating transactions by users deemed national security threats, including hackers supported by North Korea.
They were stealing billions of dollars in crypto from various platforms, and using the proceeds to fund Pyongyang’s nuclear weapons programme, US officials said.
After sanctioning Tornado Cash, six users joined forces and sued OFAC for applying a law they argue is ill-suited to address issues raised by blockchain-based technology.
Rejected argument
Likewise, Pertsev argued during his trial in March that prosecutors were wrong to hold him accountable for what Tornado Cash’s users were doing on the platform.
The judges rejected that argument.
“Tornado Cash in its nature and functioning is a tool intended for criminals,” Judge Henrieke Slaar said from the bench. “The criminal user is fully facilitated.”
In the US civil case, the plaintiffs argued that code is not the same thing as a person or company and OFAC was wrong to add Tornado Cash’s code to its sanctions list. The judges agreed.
“We hold that Tornado Cash’s immutable smart contracts… are not the ‘property’ of a foreign national or entity,” the judges wrote. “OFAC overstepped its congressionally defined authority.”
Meanwhile, Pertsev is in pre-trial detention in a penitentiary in the Dutch town of Zaanstad.
De Boer said that a date for his appeal hasn’t been confirmed yet, but they are working to push for an appeal as soon as possible.
Liam Kelly is a Berlin-based DL News correspondent. Got a tip? Email at liam@dlnews.com.
