The Tornado Cash Controversy: Should Crypto Developers Be Prosecuted?

By Michael B. Cohen

Vice President of Global Operations


Tornado Cash, a crypto mixer company, has become a poster child for what’s wrong with the cryptocurrency industry. Its developer, Alexey Pertsev, was arrested in Amsterdam by Dutch authorities on suspicion of involvement with the money laundering that occurred on the Tornado Cash platform. Protestors say the move is a chilling step in the direction of holding crypto developers responsible for financial crimes committed by hackers on their platform. 

The Dutch Financial Crime Authority (FIOD) stated that the arrest of Alexey Pertsev was on suspicion of “involvement in concealing criminal financial flows and facilitating money laundering.” After a hearing, a judge in Amsterdam decided that Pertsev would be kept in custody for two weeks during a thorough investigation. 

What’s at stake is the interpretation of “involvement.” Are Dutch authorities suggesting that Pertsev and other crypto developers may be directly colluding with cyber criminals and intending to provide them with easy ways to steal cryptocurrency, or are the authorities, as stated by protestors, unfairly criminalizing certain types of innovation and holding developers responsible for the technology that can enable criminal activity? 

Does Innovation Mean Involvement? 

This is a burning issue in the 21st century – how much does innovation contribute to crime and what responsibility do innovators have in the misuse of their technology? 

On the one hand, crypto mixers – which enhance the anonymity and privacy of blockchain transactions – are legal, at least for the time being. On the other hand, on August 8 Tornado Cash specifically was sanctioned by the Office of Foreign Assets Control (OFAC), an enforcement agency within the U.S. Treasury. What prompted Tornado Cash to become a sanctioned crypto mixer was the fact that hackers used Tornado’s technology to disguise illegal transactions. 

Was it fair to arrest Alexey Pertsev because the specific crypto mixer he developed was used for illegal purposes? Or was Pertsev arrested on investigation of possible direct involvement with the hackers? It seems the protestors in Amsterdam have assumed Pertsev is being unjustly arrested for creating a crypto mixer, although the story, and Pertsev’s role, may be more complex. 

Are Crypto Mixers Problematic? 

Tornado Cash is a sanctioned crypto mixer because of its use in the largest crypto heist in history – the Ronen Bridge theft, which robbed $516 million from customers. Even though the vast majority of these funds were returned, the incident still represents a significant threat. 

Although sanctioned crypto mixers are used by hackers, it’s not clear that the developers intended these tools to be used for illegal purposes. Most people who use crypto mixers aren’t cyber criminals. However, it’s undeniable that this technology makes it easier for cybercriminals to get away with theft. 

The ethical and legal debate raging about sanctioned crypto mixers will continue. In the meantime, if you use a crypto mixer, it can enhance your privacy. However, others using this technology may not have your best interests at heart. 

The best way to stay safe on the blockchain is to protect your keys and codes, research all merchants and brokers to verify their legitimacy, and update your security software. This isn’t a guarantee that your bitcoin wallet won’t get hacked, but it can help you avoid losing your money online. 

If you’ve lost funds on the blockchain and are worried they have been laundered, talk to MyChargeBack experts about tracking down your funds. 

MyChargeBack Will Investigate Your Crypto Case

If you have lost money on the blockchain through unregulated brokers, bitcoin wallet hacking, or fake merchants, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim. 

MyChargeBack has developed working relationships with law enforcement agencies worldwide, has extensive knowledge and experience with crypto tracking, and can improve your prospects of getting your funds back.