YEREVAN (CoinChapter.com) — Alexey Pertsev, the developer of Tornado Cash, a cryptocurrency mixing protocol, will remain in pre-trial detention. In a Nov. 21 post on X, Pertsev confirmed the court’s decision to prolong his detention, stating,

“This decision significantly complicates my ability to prepare for the appeal, but I remain determined to continue fighting for justice.”

Alexey Pertsev Pre-Trial Detention Update. Source: @alex_pertsev

Pertsev has been detained since August 2022 over allegations of money laundering related to Tornado Cash. The court’s latest decision also comes as legal and regulatory scrutiny around cryptocurrency mixing services continues to grow.

Tornado Cash Usage Draws Government Attention

Tornado Cash remains operational despite facing sanctions from the United States government since 2022. On Nov. 14, Democratic members of the U.S. House of Representatives raised concerns about the platform’s continued activity.

Lawmakers highlighted a significant rise in usage, reporting that Tornado Cash received $1.9 billion in deposits during the first half of 2024. This represents a 45% increase compared to the total deposits recorded in 2023. The increase has prompted renewed questions about the effectiveness of sanctions and the role of mixers in potential illicit activities.

Tornado Cash Monthly Deposit and Withdrawal Data. Source: charliemarketplace

Government officials are pushing for additional measures to monitor and address the use of cryptocurrency mixing protocols like Tornado Cash.

Court Convicts Pertsev on Money Laundering Charges

In May 2024, Pertsev was convicted of money laundering by the Dutch s-Hertogenbosch Court of Appeal. The court found him guilty of laundering $1.2 billion in illicit assets through Tornado Cash. He was sentenced to five years and four months in prison.

In the March trial, Pertsev claimed he was not responsible for users’ actions on Tornado Cash and highlighted its non-custodial design. The court dismissed his claim and stated that developers failed to implement stronger measures to prevent criminal misuse.

The case has raised concerns for developers of privacy-preserving blockchain tools, particularly around their legal responsibilities and how their technologies are used.

Privacy Protocols Face Increasing Legal Challenges

Notably, Tornado Cash’s ongoing legal battles underline broader regulatory issues surrounding cryptocurrency mixers. The platform’s ability to provide anonymity for users has drawn criticism from governments worldwide.

Above all, according to experts, balancing privacy with compliance will likely shape the future of blockchain privacy protocols. Tornado Cash, while still operational, continues to face heightened scrutiny from regulatory and legal authorities.

Matthew Niemerg, AlephZero, for CT

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