More than 50 people gathered in Amsterdam's Dam Square on Saturday to protest the arrest of blockchain developer Alexey Pertsev, who was arrested Aug. 10 on suspicion of involvement in the Tornado Cash protocol that was sanctioned earlier this month by U.S. authorities.
The 29-year-old was held just two days after the U.S Treasury Dept. froze Tornado, a virtual-currency mixer it said was used by North Korean hackers. After an Aug. 12 closed-door hearing, an examining judge agreed to keep him in custody for two weeks. A press release issued by Dutch financial crime authority FIOD said the arrest was on suspicion of “involvement in concealing criminal financial flows and facilitating money laundering” through the service, which can obfuscate the source and destination of funds that pass through it.
Read more: Tornado Cash Sanctions Are Spiraling Into Compliance Nightmares
While the system can be used to bury criminal proceedings, it also has legitimate applications. Dutch authorities have not stated just which laws Pertsev allegedly broke. Different press releases and statements have offered different explanations. Pertsev himself has yet to be charged with any wrongdoing, so the demonstrators were reluctant to comment on legal issues. Many, however, worry about what Pertsev's arrest means for the future of Web3 and are conscious of a chilling effect on the Netherlands’ blockchain ecosystem.
“It’s a case where the fundamental principle of crypto is being questioned,” Roman Buzko of law firm Buzko Krasnov told CoinDesk at the demonstration. The case concerns “whether code is an expression of free speech. In my view, it is.”
In the U.S., code is deemed protected under the First Amendment to the country's constitution, but that's a notion still being tested in Europe.
The protestors, who included Pertsev’s wife Xenia Malik, waved placards demanding his release and chanted “open source [code] is not a crime.”
FIOD also said that those behind decentralized autonomous organizations (DAO), the loose structures that govern many Web3 projects, “have made large-scale profits” from criminal flows, though it is not clear if they consider Pertsev to have been involved.
Read more: Tornado Cash Sanctions Are Spiraling Into Compliance Nightmares
The arrest “goes against everything I’ve been working on for the last couple of years,” protestor Eléonore Blanc said. “This is creating a chilling effect that goes against innovation, that goes against the community.”
The FIOD statement is “more FUD, more fear, uncertainty and doubt, coming from Dutch regulators and from Dutch institutions. It’s not good,” she said. Blanc is the founder of cryptocanal.org, a Web3 events and consultancy company. “Let’s stay competitive, let’s have clear laws … this creates uncertainty.”