On February 7, 2025, Alexey Pertsev, the founder of Tornado Cash, was released from prison, remaining under house arrest. This move is seen as a significant phase in his ongoing legal struggle.
Pertsev's Release and Legal Battle
A Dutch court ruled to terminate Pertsev's pretrial detention, but he will be under house arrest and electronic monitoring. Pertsev had been detained since 2022 on money laundering charges involving Tornado Cash, a service that enables anonymous transactions. Though Pertsev lacked control over transactions, he was arrested and sentenced to five years for allegedly not preventing illegal activities. His release followed an extension of his detention in November 2024. Pertsev expressed gratitude for the chance to prepare his appeal outside prison, stating in social media, 'It is not real freedom, but it is better than prison.'
U.S. Treasury’s Sanctions on Tornado Cash
In 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, claiming over $7 billion in illicit funds passed through the program. The sanctions were unpopular due to the decentralized nature, limiting developer control over transactions. Pertsev’s case was validated when a court upheld Tornado Cash developers and overturned OFAC sanctions, indicating a shift in regulations for privacy software and immutable code.
Impact on the Market
Pertsev’s release influenced the market. The price of TORN, Tornado Cash's central token, rose 15% on his release day. The token had gained 40% in the prior month, with ongoing support from the crypto community, including Ethereum’s Vitalik Buterin, further driving the trend.
As Pertsev awaits his appeal, his case is expected to be pivotal for the future of privacy in the cryptocurrency world.
