Crypto Mixer Developer Gets 5 Years In Netherlands Court; SAB 121 Vote Today In Senate

crypto mixer – developer convicted

Can a coder be convicted of money laundering even if all he did was the coding for a crypto mixing service?

In the Netherlands, the answer is “yes.” In the U.S., we’ll see.

Alexey Pertsev, one of the developers of Tornado Cash, a crypto mixer, was sentenced yesterday in a Netherlands’ courtroom to a prison term of five years and four months for laundering $2.2 billion in crypto assets. According to DL News, Judge Henrieke Slaar said, “Tornado Cash in its nature and functioning is a tool intended for criminals…The criminal user is fully facilitated.” Read more.

more tips: 

    • The ruling against Pertsev, in Dutch, is here.

crypto mixer – reaction

Coin Center’s Peter Van Valkenburgh commented on X, “I’m sad for Alexey and angry that the money laundering laws in the Netherlands have such a low threshold for intent, essentially mere negligence.”

Given there is a case currently pending  in U.S. courts against the developers of Tornado Cash brought by the Department of Justice, he added, “Nothing in this ruling should prejudice or carry weight in Roman Storm‘s case in the [Southern District of New York].” Read Van Valkenburgh’s tweet thread.

In early April, Coin Center, DeFi Education and Blockchain Association brought three separate briefs supporting the Tornado Cash developers.

Meanwhile, Treasury and Congress has taken note of the crypto mixer challenges.

Last October, Treasury proposed a new rulemaking “that identifies international Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern.” Read more.

In Congress, a vast number of perspectives have been captured in recent bills on illicit finance which could include mixers.  This includes a new bill earlier this month from Rep. Sean Casten (D, IL). Titled the “Blockchain Integrity Act,” the legislation prohibits regulated financial institutions from “transacting with funds that have gone through digital asset mixers.” Read the release.

rescinding SAB 121

A source confirms with Politico’s Eleanor Mueller that today is the day (or tomorrow for sure) for the Democrat-controlled Senate to vote on S.J. Res.59 – the joint resolution rescinding the SEC’s Staff Accounting Bulletin 121 on crypto custody. Mueller wrote Monday afternoon, “Final timing will depend on Senate attendance Tuesday, said the aide, who was granted anonymity to discuss unannounced plans.” Read more (subscription).

The House passed the resolution last week with an unexpectedly large number of Democrats supporting (21).

what you should know: Whether today or tomorrow, the vote will reveal the Democratic split on digital assets and opinions on the SEC and its Chair Gary Gensler. President Joe Biden still gets to veto if he wants – which he says he does.

race for the Senate – Arizona

An article on financial advisors recommending crypto products to their clients on InvestmentNews[.]com has inspired U.S. Senate candidate in Arizona Kari Lake (R) to come out in support of digital assets on X, “Crypto is one of Arizona’s fastest growing economic sectors. As crypto currency investing becomes more mainstream and faces increasing regulatory pressure, it’s essential that the people you elect stand up for this critical, rapidly-expanding industry.” Read her tweet. (h/t @danspuller)

what you should know: Lake could be a supporter of crypto without being prodded. But… other factors such as the opportunity to entice crypto campaign donations or aligning with former President Trump’s pro-crypto comments last week may also be in play.

election reality

A CoinDesk feature article on digital assets and the U.S. elections takes a detailed look at how the U.S. elections could play out with voters’ opinions on crypto as a factor. It’s not so simple. For example, “Though crypto-holding voters tend to prefer Trump for president, industry insiders are split on whether or not a Trump presidency would actually be better for crypto.” Read more.

stablecoin issuer adds Giancarlo

Former Commodity Futures Trading Commission (CFTC) Chair Chris Giancarlo has joined stablecoin issuer and crypto infrastructure provider Paxos as a member of its board of directors.

Giancarlo has been an advocate of digital assets and a nuanced approach to central bank digital currencies (CBDCs) as a co-founder of the Digital Dollar Project.

Charles Cascarilla, CEO and co-founder of Paxos, said in a statement, “[Mr. Giancarlo] has been at the forefront of advocating for blockchain to improve the infrastructure of our financial system. His insights will support us as we expand our position as a leader in regulated digital asset market structure and stablecoin innovation.”

Read the release.

FIT 21 support

With the House floor vote for the “Financial Innovation and Technology for the 21st Century Act” or FIT 21 [H.R.4763] imminent next week, venture capital firm a16z and one of its partners, Chris Dixon, came out in support of the digital asset market structure bill in a tweet on X yesterday.

Dixon wrote, “FIT21 will help stamp out scams, ensure oversight of crypto exchanges, and protect American consumers by implementing strict rules on crypto trading. FIT21 has bipartisan support because it tackles these issues.”

He also tossed in some support for the “Stand with Crypto” advocacy organization started by Coinbase.

Read the entire tweet.

what you should know: Dixon was photographed in mid-April meeting with the Senate Innovation Caucus led by Senator Cynthis Lummis (R, WY) last month. He was there to discuss digital assets as well his new book on web3, “Read, Write, Own”. The venture firm remains an active player on Capitol Hill and the creation of innovation-friendly legislation.

still more tips

Exclusive-North Korea laundered $147.5 million in stolen crypto in March, say UN experts – Reuters on Yahoo

Opinion: What President Biden’s Crypto Politics Might Really Be About – David Morris on Unchained

Opinion: Crypto ‘fools’ and the 2024 election – Jeff John Roberts of Fortune on AOL