Alexey Pertsev is a developer of Tornado Cash and the founder and CEO of PepperSec.
PepperSec is a cybersecurity firm staffed by ethical computer hackers. PepperSec was founded by Pertsev, Roman Storm, and Roman Semenov in 2018.
Pertsev is a developer of Tornado Cash, a virtual currency mixer that anonymizes cryptocurrency transactions. It runs on software code developed by Pertsev's company, PepperSec. Tornado Cash is not a company; it is a decentralized, immutable, non-custodial smart contract. It was launched in 2019 by PepperSec cofounders Roman Storm and Roman Semenov.
In June 2022, the FIOD began an investigation into Tornado Cash, alleging that the company was not properly checking to see if funds were of criminal origin. On August 8, 2022, the United States Department of the Treasury's Office of Foreign Assets Control announced sanctions against Tornado Cash on the basis of its use in money laundering of over $7 billion worth of cryptocurrency, which is the sum of Tornado Cash's total transactions since its founding in 2019. Meanwhile, the FIOD alleged that at least $1 billion of the $7 billion worth of transactions was of criminal origin. North Korean hackers called the Lazarus Group are linked to the theft of over $455 million of those funds. In the week following the Treasury's announcement of the sanctions, Tornado Cash's token TORN dropped in value by 56 percent. Tornado Cash's DAO was shut down on August 14, 2022; the funds of the DAO were returned to its governance contracts and its multisig deleted.
On August 10, 2022, Pertsev was arrested––but not charged––on the order of Dutch authorities under suspicion of "involvement in concealing criminal financial flows and facilitating money laundering." On August 12, he was brought before an examining judge who ruled that he should be held in custody for an initial two weeks. On August 24, 2022, a judge ruled that Pertsev must remain in jail for a minimum of ninety more days. Pertsev's arrest has led to protests from members of the Web3 community, who say that arresting a developer for the illicit use of their code by others sets a precedent that threatens the future of open-source software. Pertsev faced additional scrutiny when it was revealed that his prior employment with Russian entity Digital Security OOO linked him to the FSB.