Tornado Cash Creator’s Jailbreak: The Legal Loophole That’s Shaking Ethereum’s Privacy Wars

• Alexey Pertsev leaves Dutch prison, transitions to home confinement while appealing $7B crypto-mixing conviction.
• U.S. court ruled immutable smart contracts aren’t property, aiding Pertsev’s cross-border legal defense strategy.

Alexey Pertsev, creator of Ethereum privacy tool Tornado Cash, will leave prison on February 7 after nearly two years in Dutch custody. A Netherlands court replaced his pretrial detention with electronic monitoring, allowing him to prepare legal appeals from home. 

Pertsev described the arrangement as “not real freedom, but better than jail” in a social media post. His lawyer, Judith de Boer, confirmed the shift, stating it enables “full focus on his defense under fairer conditions.”  

Pertsev was convicted in May 2024 of laundering $7 billion through Tornado Cash , which authorities allege processed funds from dozens of hacks since 2019. The Dutch court sentenced him to 64 months, arguing he failed to prevent criminal misuse.

Dear Friends, on Friday 7 February at 10 am I will be free! It is not real freedom, but it is better than prison. Today, a Dutch court suspended my pretrial detention under the condition of electronic monitoring. This will give me a chance to work on my appeal and fight for…

— Alexey Pertsev (@alex_pertsev) February 6, 2025

Continuing with ETHNews reports , During the trial, Pertsev maintained the software was designed for transactional privacy, not illegal activity, adding that users—not developers—bear responsibility for how tools are applied.  

The case has drawn scrutiny from privacy advocates and technologists, who argue holding developers liable for code misuse sets a dangerous precedent. Critics highlight Tornado Cash’s reliance on immutable smart contracts, which operate autonomously once deployed. 

A US federal court echoed this in November 2023, overturning sanctions against the tool by stating its automated design “prevents direct control over funds” and cannot be classified as property. This ruling strengthened Pertsev’s appeal arguments, now active in both Dutch and US courts.  

While Pertsev’s release marks a procedural shift, co-developers Roman Storm and Roman Semenov face separate charges. Storm awaits trial in the US, while Semenov remains at large under an international warrant. 

Dutch prosecutors continue to assert Pertsev’s role in enabling crime, despite the US court’s distinction between tool creation and operational oversight.  Pertsev’s case underscores unresolved tensions between privacy rights and regulatory enforcement in decentralized technologies. 

With electronic monitoring now in place, he aims to challenge his conviction, citing the US ruling as a potential turning point. As debates over code accountability intensify, his appeals could influence how global jurisdictions treat developers of open-source tools.