- Attorney Judith de Boer said Pertsev's appeal casts a spotlight on EU privacy laws.
- Tornado Cash cases are testing whether laws should be applied to smart contracts.
- A US ruling has shaken up the Tornado Cash cases.
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Ever since Dutch prosecutors indicted Alexey Pertsev on charges he facilitated money laundering at Tornado Cash, there has been one burning question at the heart of the case.
Who should be held responsible for the potential misuse of a decentralised protocol?
This is the query Judith de Boer, Pertsev’s lawyer, is pursuing.
She is arguing on behalf of the 31-year-old dev that the Dutch court erred in May when it convicted him of unlawfully permitting bad actors to use the crypto mixer.
Dev’s defence
During his trial in the spring, Pertsev defended himself by testifying that Tornado Cash, an Ethereum-based platform that used smart contracts to anonymise crypto transactions, essentially worked on autopilot.
He didn’t bear responsibility for deciding who used the platform — computer programmes did. A Dutch judge rejected his argument and sentenced him to more than five years in prison.
Privacy advocates decried the decision. Now it is de Boer’s job to persuade an appellate court that the trial judge misapplied the law.
“European privacy laws protect the right to financial privacy, and Tornado Cash was designed as a decentralised protocol to uphold this principle,” de Boer told DL News.
“The defence view is that this is a misapplication of the law and will challenge it on appeal.”
‘The US case highlights the legitimate use of the protocol by individuals.’
— Judith de Boer, lawyer
As it happens, Pertsev, 31, who was released on bail pending his appeal last week, is getting a boost from a surprising source — a US court.
In November, an appeals court in New Orleans ruled in a civil case connected to Tornado Cash that the government had wrongly used a national security law to authorise sanctions of the platform in 2022.
The problem, the court said, was that the law addressed people and corporate entities but not “immutable smart contracts.” It ordered the case to be sent back to a lower court for review.
Then in January, the government’s Office of Foreign Assets Control, or OFAC, signalled it would not challenge the ruling. Tornado Cash supporters hailed the decision as an “absolute win.”
Now the action will turn to Pertsev’s appeal, which is under way, and the criminal trial of his fellow Tornado Cash dev, Roman Storm, in a US court in April.
Legitimate use
While Pertsev’s case does not focus on the OFAC sanctions because it is a matter of Dutch law, de Boer welcomed the US court’s ruling.
“The US case highlights the legitimate use of the protocol by individuals and reinforces its decentralised nature,” said de Boer, a partner at Hertoghs in Amsterdam.
As for Pertsev, he was released on bail last week pending his appeal after initially being denied in July. He wasted no time in asking for supporters to contribute funds to his case.
“Freedom is priceless, but my freedom costs a lot of money,” Pertsev said on X.
Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.