Alexei Burtsev, the developer of the Ethereum-based Tornado Cash cryptocurrency mixer, was sentenced to 64 months in prison after a Dutch court found him guilty of money laundering on Tuesday.
The judge stated that the platform was “intended for criminals” and that Burtsev should have suspected the criminal origins of the transactions.
The closely watched case is a major blow to financial privacy advocates. Many critics argue that Burtsev is being unfairly targeted as an open source platform developer.
Furthermore, they say he had no control over how users chose to use Tornado Cash to hide transaction history on the public blockchain.
However, prosecutors successfully argued that Burtsev did little to prevent the mixer from being used for money laundering.
They rejected claims that its liabilities had been reduced due to the decentralized nature of the platform's operations.
Experts expect it to have a negative impact on the development of open source tools that enable anonymity on Bitcoin and other blockchains. They argue that this sets a precedent for holding developers responsible for the actions of anonymous users.
The US Treasury Department imposed sanctions on Tornado Cash in 2022 over allegations that it hid money stolen by North Korean state hackers. Burtsev was arrested days later, dealing a major blow to the nascent cryptocurrency privacy sector.