On Tuesday a Dutch court sentenced the programmer Alexey Pertsev to five years in prison. The court found him guilty of money laundering because the "Tornado Cash" software he developed enables criminals to carry out completely anonymous and untraceable crypto transactions (so-called "crypto mixer")
This happens with cash too. If you take in a bunch of cash, you have a duty to know what it’s from so that you’re not facilitating terrorism or crime or subverting sanctions. In fact, of you handle cash or finance, you generally have to take training on these laws every year.
This thing is the definition of money laundering and was known for exactly those problems.
But in essence, they are punishing this guy for writing code. And at least in the United States, code is considered speech. And this is a very bad precedent. I know that this is a Dutch court, but still that is not a good thing.
And see, there’s where the problem comes in. He never actually took the currency from the smart contract itself. In fact, it is still online and being used as of this day. And he is getting none of the currency just like he got none of the currency before. What they are going after him for is creating a front-end user interface to access the contract. I believe they did take a fee from that user interface since it made it simpler than interacting with the contract directly. The problem is that they are saying that by taking fees from that user interface, he is money laundering, but not everybody who used that user interface was using it for money laundering. A famous example is the creator of Ethereum used it to donate to Ukraine.
This happens with cash too. If you take in a bunch of cash, you have a duty to know what it’s from so that you’re not facilitating terrorism or crime or subverting sanctions. In fact, of you handle cash or finance, you generally have to take training on these laws every year.
This thing is the definition of money laundering and was known for exactly those problems.
There’s no reason people using tornado wouldn’t have to disclose their sources to the authorities, same as cash.
But it does protect them from malicious actors.
But in essence, they are punishing this guy for writing code. And at least in the United States, code is considered speech. And this is a very bad precedent. I know that this is a Dutch court, but still that is not a good thing.
He can write the code. He can release the source. Nothing is illegal until he takes currency.
And see, there’s where the problem comes in. He never actually took the currency from the smart contract itself. In fact, it is still online and being used as of this day. And he is getting none of the currency just like he got none of the currency before. What they are going after him for is creating a front-end user interface to access the contract. I believe they did take a fee from that user interface since it made it simpler than interacting with the contract directly. The problem is that they are saying that by taking fees from that user interface, he is money laundering, but not everybody who used that user interface was using it for money laundering. A famous example is the creator of Ethereum used it to donate to Ukraine.