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Guidance Notes
- Lawyer Judith de Boer highlights that Pertsev’s appeal uncovers problems within EU privacy regulations.
- The Tornado Cash situation is examining whether the legislation pertains to smart contracts.
- A decision in the U.S. has unsettled the basis of the Tornado Cash matter.
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Since Dutch authorities charged Alexey Pertsev with facilitating money laundering via Tornado Cash, a significant inquiry has arisen.
Who holds accountability for possible exploitation of decentralized systems?
This is the question examined by Pertsev’s attorney, Judith de Boer.
She advocates for the 31-year-old programmer, contending that the Dutch court incorrectly determined in May that he unlawfully permitted offenders to utilize the crypto mixer.
Defense of the Programmer
During the trial in spring, Pertsev provided testimony in his defense, asserting that Tornado Cash is an Ethereum-based service that employs smart contracts to anonymize cryptocurrency transactions, operating essentially on its own.
He does not control who accesses the platform; instead, it is the software that makes those choices. The Dutch judge rejected his defense and imposed a sentence of over five years in prison.
Privacy supporters criticized the verdict. Now, de Boer’s objective is to convince the appellate court that the trial judge misinterpreted the law.
“European privacy legislation safeguards financial privacy rights, and Tornado Cash was created as a decentralized system to uphold this principle,” de Boer informed DL News.
“The defense’s stance is that this constitutes a misinterpretation of the law, and we will contest this in the appeal.”
The U.S. situation emphasizes the rightful application of the protocol by individuals.”
—Judith de Boer, attorney
Interestingly, 31-year-old Peercy was granted bail last week while he awaits his appeal, receiving unexpected backing from a U.S. court.
In November of the previous year, an appellate court in New Orleans determined in a civil matter concerning Tornado Cash that the government had misused national security regulations to impose sanctions on the platform.
The court observed that the legislation is aimed at individuals and enterprises, not “immutable smart contracts.” As a result, it mandated that the case be returned to a lower court for further review.
In January, the government’s Office of Foreign Assets Control (OFAC) declared it would not challenge this decision. Advocates of Tornado Cash celebrated the ruling as a “complete triumph.”
Focus now shifts to Peercy’s pending appeal and the criminal proceedings against his associate, Roman Storm, set for April in U.S. court.
Rightful Application
Though Peercy’s situation does not center on OFAC sanctions, as it relates to Dutch legislation, de Boer expressed gratitude for the U.S. court’s verdict.
“The American case highlights the rightful application of the protocol by individuals and bolsters its decentralized character,” remarked de Boer, a partner at Hertoghs in Amsterdam.
Regarding Peercy, he was granted bail last week while he awaits his appeal, having been previously denied in July. He promptly urged his supporters to contribute to his case.
“Liberty is invaluable, but my liberty demands substantial financial resources,” Peercy mentioned on X.
Edward Robinson serves as the story editor at DL News. Reach the author at [email protected].
