Tornado Cash Dev Pertsev's $1.2B Money Laundering Allegations Detailed Ahead of Dutch Trial

An indictment by Dutch prosecutors lists 40 suspicious transfers – the largest from the Axie Infinity Ronin exploit.

AccessTimeIconMar 20, 2024 at 2:01 p.m. UTC
Updated Mar 22, 2024 at 7:07 a.m. UTC

Russian developer Alexey Pertsev is accused of laundering $1.2 billion worth of crypto through the anonymizing tool Tornado Cash, Dutch prosecutors detailed in an indictment shared ahead of his trial on March 26.

The indictment, seen by CoinDesk, says that between July 9, 2019 and Aug. 10, 2022, "at least in the Netherlands and/or in Russia and/or the United States and/or in Dubai, together and in association with one or more others, at least alone," Pertsev allegedly "made a habit of committing money laundering."

Tornado Cash developers Roman Storm and Roman Semenov also face allegations of money laundering and sanctions violations in the U.S. The charges detailed in the Dutch indictment against Pertsev align with allegations faced by Storm and Semenov in the U.S. Storm pleaded not guilty to the charges, and is set to go on trial this September. The U.S. has not yet been able to arrest Semenov.

Pertsev was jailed in the Netherlands in August 2022 on vague charges shortly after Tornado Cash was blacklisted by a U.S. sanctions watchdog for its alleged use by the North Korean regime. His arrest led to a public outcry, particularly from the developer community concerned that the accusations against Pertsev could set a dangerous precedent for incriminating software developers.

During 2023 hearings at a ‘S-Hertegonbosch court, Dutch public prosecutors said Pertsev was accused of routinely laundering more than 500,000 ether (ETH) of suspected criminal origin. Pertsev has denied these charges and was allowed by the court to await trial from home.

The indictment lists nearly 40 transactions coming up to 535,809 ETH originating from different platforms, including KuCoin and Liquid – an exchange that was acquired by FTX before its 2022 collapse. The largest listed sum of 175,100 ETH (around $585 million in today's prices) came from Axie Infinity's Ronin network, which saw around $625 million stolen in a 2022 exploit – one of the worst in crypto's history. The exploit has been blamed on the notorious hacker group Lazarus, with alleged ties to the North Korean government.

Pertsev and his associates should have at least suspected the funds' criminal origins, Dutch prosecutors allege.

"The origin and/or the movement hidden or concealed and/or hidden or concealed who is the owner(s) of the rights to the object(s) was/were and/or hidden or concealed by whom it(s) had/had object(s) available, while the suspect and/or his co-perpetrator(s) knew (each time), at least could reasonably have suspected that the object(s) were entirely or in part - directly or indirectly - came from any crime," the indictment said.

KuCoin said it has not received any official notifications from authorities regarding this case.

"We consistently fulfill our anti-money laundering and anti-terrorist financing obligations through various effective measures and means to mitigate related risks. If the regulator requires KuCoin will voluntarily and actively support and cooperate with regulatory investigations in accordance with legal procedures," a spokesperson said in an emailed statement to CoinDesk

A legal fund for Pertsev and Storm's defense – supported by NSA whistleblower Edward Snowden – has raised $350,000.

Pertsev's trial will take place on March 26 and 27 at a ‘S-Hertegonbosch court.

UPDATE (March 22, 07:05 UTC): Adds comment from KuCoin.

Edited by Nikhilesh De.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.