Tornado Cash Developer’s Detention Sparks Concerns for Privacy Tech Developers

Alexey Pertsev, the developer behind the Tornado Cash cryptocurrency mixing protocol, will remain in pre-trial detention as he continues to await his trial.

This ruling has intensified concerns within the privacy-tech community. On November 21, Pertsev expressed his frustration on X, noting that the court’s decision to extend his detention severely hampers his ability to prepare for an appeal.

The decision comes amid heightened regulatory scrutiny over Tornado Cash, particularly following the service’s 2022 sanctioning. On November 14, several members of the U.S. House of Representatives called on the Treasury Department to take action against Tornado Cash, pointing out a notable increase in mixer usage. In the first half of 2024 alone, the protocol processed $1.8 billion in deposits—a 45% increase compared to the entirety of 2023.

Pertsev’s detention stems from charges of money laundering, despite the non-custodial nature of Tornado Cash, which doesn’t control or hold users’ funds. In May, Dutch courts convicted him for allegedly laundering $1.2 billion in illicit assets through the platform, sentencing him to over five years in prison.

During his trial, Pertsev defended his actions, arguing that he should not be held responsible for how users chose to operate the protocol. However, the court disagreed, asserting that the co-founders could have implemented additional measures to prevent misuse.

Pertsev’s ongoing legal battle is raising alarm among developers of privacy-preserving technologies, who now face uncertainty regarding how to offer such services while complying with increasingly stringent regulations.