Court Ruling on Tornado Cash Developer has Chilling Effect: Report

Court Ruling on Tornado Cash Developer has Chilling Effect: Report

The court ruling on the Tornado Cash developer Alexey Pertsev has sparked heated debates among the crypto community. Earlier last week, Pertsev was found guilty of money laundering.

The Dutch court charged the 31-year-old developer for facilitating the laundering of $1.2 billion worth of crypto through the Tornado Cash between 2019  and 2022.

Court Sentence Tornado Cash Developer

Even though Pertsev was not directly involved in laundering the multi-million dollars through the coin mixer, the bench of judges ordered the developer to be placed behind bars for five years and four months.

The crypto advocate criticized the judge’s decision on the Pertsev case. In an exclusive interview with Holland and Knight, lawyer Andrew Balthazor explained the implications of the court verdict on the crypto sector.

The lawyer outlined that any developer whose software will be available for public use will be held liable for the foreseeable outcome of using the software. Citing the theory of liability, Balthazor stated that the developer is responsible for designing security mechanisms that prevent criminals from using the software.

The lawyer argued there is no defense to disclaim knowledge of a particular criminal act or highlight the software’s technical challenges to prevent its use by bad actors. He believes that the verdict on the Tornado Cash developer was based on the theory of liability.

Balthazor admitted that there were a lot of misconceptions about the theory of liability.  The executive confessed that the crypto community was aware that the court verdict would impact the software’s privacy.

Crypto Community Reacts to Court Verdict on Tornado Cash Developer

The lawyer argued that the immutable nature of crypto assets, including blockchain and smart contracts, labels these products as not as risky. Balthazor stated that the theory of liability exposed the developers working on immutable smart contracts to high risk.

The lawyer suggested that to reduce the risk, developers should consider designing their software in a manner that they can quickly amend to fit the regulators’ requirements. The regulation changes has compelled some stablecoin issuers to integrate an additional feature that automatically blocks blockchain addresses from sanctioned states.

He explained that the security measures embraced by renowned stablecoin issuers aim to prevent individuals from sanctioned countries from accessing their platform. Moreover, Balthazor highlighted that the court ruling on the Pertsev case has increased the risk related to decentralized projects.

He noted that the decentralized nature of the blockchain and crypto projects limits developers from making the necessary adjustments.

Impact of Technological Advancement on Existing Crypto Regulation

Elsewhere, Natalia Latka, the director of public policy and regulatory matters at Merkle Science, explained that the theory of liability has continuously progressed. Occasionally, software developers are considered to be the creators of tools and projects designed to execute specific technical tasks.

Latka confessed that the community considers the developers as not responsible for the public use of their software. In most cases, users are held accountable for using this software.

Latka noted that the tech industry is not considered neutral with the emergence of advanced technology, such as decentralized networks.  The exciting growth of the tech industry seeks to challenge the existing regulatory frameworks.

Therefore, the developers are urged to be hyper-vigilant while building their projects. Latka stated that software developers should consider the legal implications of the project and the external threats, such as misuse of software.

Even though the changes in the regulatory framework are unknown to many, the crypto community has condemned the court verdict. On X, the founder of CryptoCanal, Eléonore Blanc, admitted that the Tornado Cash developer grabbed the attention of many.

In her tweet, Blanc explained the implications of the Tornado Cash developer’s case. Having ignored the defense team’s claims, Blanc argued that interpreting the Pertsev verdict threatened the crypto industry.

The executive urged the crypto community to support Pertsev in challenging the court decision. Blanc noted that all developers building in the crypto sector were Pertsev.

Based on the crypto developers’ common roles and shared values, Blancc vowed to support Pertsev. In support of Pertsev’s remarks, another X user lamented that if the theory of liability applies, then the developers will be at risk of facing legal charges.

Editorial credit: rafapress /

All trademarks, logos, and images displayed on this site belong to their respective owners and have been utilized under the Fair Use Act. The materials on this site should not be interpreted as financial advice. When we incorporate content from other sites, we ensure each author receives proper attribution by providing a link to the original content. This site might maintain financial affiliations with a selection of the brands and firms mentioned herein. As a result, we may receive compensation if our readers opt to click on these links within our content and subsequently register for the products or services on offer. However, we neither represent nor endorse these services, brands, or companies. Therefore, any disputes that may arise with the mentioned brands or companies need to be directly addressed with the respective parties involved. We urge our readers to exercise their own judgement when clicking on links within our content and ultimately signing up for any products or services. The responsibility lies solely with them. Please read our full disclaimer and terms of use policy here.

Leave a Reply

Your email address will not be published. Required fields are marked *