Freedom of speech isn’t a ‘trump card’ for Tornado Cash developers

May 21, 2024 Coin Telegraph

Does code as freedom of speech mean that developers aren’t responsible for how their creations are used?

Crypto industry advocates are locked in a debate with regulators over whether a protocol’s code constitutes free speech, and what that means for liability.

Lawmakers have long accused the crypto industry of facilitating illicit activities, from money laundering to financing terrorism. This has led to several court cases, arrests and even incarcerations.

Recent high-profile examples include the arrests of developers who worked on crypto mixers Tornado Cash and Samurai Wallet, as well as the United States Securities and Exchange Commission’s (SECs) planned enforcement action against decentralized exchange Uniswap.

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Tornado Cash verdict has chilling implications for crypto industry

May 19, 2024 Coin Telegraph

Coin Telegraph

The conviction of Tornado Cash developer Alexey Pertsev reinforces a very broad interpretation of criminal liability, which has major repercussions for blockchain.

The conviction of Alexey Pertsev, a developer of coin-mixing protocol Tornado Cash, comes from a chilling interpretation of criminal liability likely to have wider ramifications for crypto.

The Dutch court’s guilty verdict means Pertsev must now serve a sentence of five years and four months for money laundering through Tornado Cash. This is despite the fact that Pertsev had no direct involvement in the laundering itself.

Andrew Balthazor, a litigator with the legal firm Holland and Knight, spoke with Cointelegraph to explain the implications of the verdict.

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UN Experts Say North Korea Laundered $147,500,000 in Stolen Crypto via Tornado Cash in March: Report

May 16, 2024 The Daily Hodl

UN Experts Say North Korea Laundered 7,500,000 in Stolen Crypto via Tornado Cash in March: Report

crypto assets

Members of a United Nations expert panel monitoring North Korea sanctions reportedly found a link between the totalitarian state and the crypto mixer Tornado Cash. According to Reuters, a confidential document from the monitors told the U.N. Security Council sanctions committee that North Korea used Tornado Cash to launder $147.5 million worth of stolen crypto […]

The post UN Experts Say North Korea Laundered $147,500,000 in Stolen Crypto via Tornado Cash in March: Report appeared first on The Daily Hodl.

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Tornado Cash Developer Alexey Pertsev Sentenced to Five Years and Four Months in Prison by Dutch Court

May 14, 2024 The Daily Hodl

Alexey Pertsev

Tornado Cash developer Alexey Pertsev has been sentenced to 64 months in jail for laundering billions of dollars, according to a new Dutch court press release. The Netherlands’ Oost-Brabant district court handed down the sentence Tuesday for his involvement in creating the Ethereum (ETH)-based coin mixing system that helps users obfuscate their digital assets. Says […]

The post Tornado Cash Developer Alexey Pertsev Sentenced to Five Years and Four Months in Prison by Dutch Court appeared first on The Daily Hodl.

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Tornado Cash Developer Alexey Pertsev Sentenced to 64 Months for Money Laundering

May 14, 2024 Bitcoin.com

Alexey Pertsev

A Dutch court has sentenced Tornado Cash developer Alexey Pertsev to five years and four months in prison for laundering $2.2 billion through the cryptocurrency mixing service. The case represents a pivotal moment for decentralized finance (defi) regulation and crypto privacy. Dutch Court Imprisons Tornado Cash Developer for $2.2 Billion Money Laundering via Crypto Mixing […]

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Tornado Cash developer guilty of money laundering

May 14, 2024 Coin Telegraph

Alexey Pertsev

Pertsev has been under arrest in the Netherlands since August 2022 after the United States government blacklisted Tornado Cash.

Alexey Pertsev, the developer of the cryptocurrency mixing protocol Tornado Cash, has been found guilty of money laundering, raising potentially severe implications for open-source code developers.

Pertsev was found guilty of money laundering by Dutch judges at the s-Hertogenbosch Court of Appeal on May 14. The developer was sentenced to five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets on the platform.

The sentencing came despite Tornado Cash being a noncustodial crypto mixing protocol — meaning that the funds that go through the protocol are never held or controlled by it.

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Stolen Poloniex Ether worth $53M never made it back to the exchange

May 14, 2024 Coin Telegraph

Stolen Poloniex Ether worth M never made it back to the exchange

Blockchain

The Poloniex hacker moved over 17,800 Ether (ETH) from six different wallets into a single Tornado Cash address.

Over half of the $100 million worth of Ether (ETH) linked to the infamous Poloniex hack from November 2023 has been siphoned via the privacy protocol Tornado Cash.

On Nov. 10, 2023, wallets belonging to crypto exchange Poloniex recorded massive unauthorized outflows. Investigations later confirmed that over $100 million worth of ETH was lost to a hack.

Despite Poloniex claiming to have identified the hacker weeks later and offering a $10 million bounty, the stolen funds never made it back to the exchange. According to the blockchain security firm CertiK, the incident was likely a “private key compromise.”

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Sens. Lummis, Wyden oppose Justice Dept. stance on Tornado Cash charges

May 13, 2024 Coin Telegraph

Attorney General Merrick Garland

If the Justice Dept. prevails in the case against the cryptocurrency mixer, internet service providers and the post office may also be liable to transmitter requirements, they said.

United States Senators Cynthia Lummis and Ron Wyden have sent a letter to Attorney General Merrick Garland voicing their concern over the Justice Department’s (DOJ’) interpretation of money transmission licensing.

As the bipartisan authors indicate in a footnote, this interpretation is being applied in the case against Roman Storm, co-founder of crypto mixer Tornado Cash, who has been charged with operating an unlicensed money transmission operation and other serious crimes.

The Bank Secrecy Act and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) clearly define money transmission as the acceptance and transmission of currency and other forms of value. Non-custodial crypto service providers do not meet the established definition of money transmitters, and the DOJ is thus acting contrary to the Treasury, muddying policy enforcement, the senators said. In their words:

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Kronos Research hacker shifts funds to Tornado Cash

May 7, 2024 Coin Telegraph

Coin Telegraph

Kronos Research was exploited for $25 million in November 2023, with one of the six wallets linked to the hacker moving funds to Tornado Cash on May 7.

The hacker behind the $25 million exploit of quantitative trading firm Kronos Research in mid-November 2023 started moving funds nearly six months after the exploit.

The hacker wallet first transferred 1,314 Ether (ETH) worth $4 million to a new address, starting with 0x8F5e4 and later transferred all the ETH to another address starting with 0x164A24b.

The hacker made 10 transactions of 100 ETH from the final wallet and transferred it to Tornado Cash, a crypto-mixing tool.

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US senators, FBI aren’t opposed to crypto privacy: Railgun contributor

May 3, 2024 Coin Telegraph

Coin Telegraph

Ethereum privacy protocol Railgun contributor Alan Scott Jr. says U.S. regulators and government agencies don’t get enough credit for genuinely “trying to understand” crypto.

United States senators and intelligence agencies may not be as opposed to privacy-focused crypto protocols as some believe, according to Railgun researcher and advocate Alan Scott Jr.

Speaking to Cointelegraph at ETH Global in Sydney on May 2, Scott — a contributor and public advocate for Railgun — said based on conversations he’s had with senators and the FBI in Washington D.C., he hasn’t seen any hints of a crypto privacy crusade on Capitol Hill.

There are many people in the upper echelons of government who are “generally smart, want to do right, and protect people,” he said.

Tornado cash