Is Alexey Pertsev working for Russia's secret service?

The Tornado Cash crypto mixer case is getting more complex.

The Tornado Cash crypto mixer case is getting more complex. Now the Russian secret service (FSB) is involved as well.

One billion dollars. That's how much money criminals are alleged to have laundered through the Ethereum mixer Tornado Cash since 2019. At least that's OFAC's reasoning for placing the technology on the U.S. government sanctions list. Since then, using the service can be illegal for American citizens.

With the de facto ban on Tornado Cash, the developers behind the mixer are also facing repression. For example, the arrest by Dutch authorities of the suspected Tornado Cash coder Alexey Pertsev in Amsterdam.

Was the Tornado Cash developer involved in intelligence operations?

But that's not all. Because, as the KYC experts at Kharon note in an investigative report, there are indications that Pertsev's possible involvement with Tornado Cash isn't the only reason for his arrest. The software developer is said to have previously worked indirectly for the Russian intelligence service, the FSB. In a report, Kharon analysts write:

''The person named in various media as the Tornado Cash developer is a former employee of a Russian company that has been sanctioned for aiding the Russian intelligence service (FSB).''

According to a Medium report, Pertsev worked for PepperSec, Inc, the company behind Tornado Cash. The interesting part is that Pertsev previously worked for a company that, according to the U.S. Department of the Treasury, is closely tied to the Russian secret service and allegedly leaked "information and technology" to the FSB. The company in question is Digital Security OOO. According to an archived website, Pertsev worked there in 2017 as a smart contract developer.

So far, the allegations against Pertsev are unconfirmed reports in the media. It is currently impossible to say whether his alleged involvement in intelligence matters has anything to do with his arrest. The Dutch financial authority FIOD cites only "concealing criminal money flows and facilitating money laundering by mixing cryptocurrencies via the decentralized Ethereum mixer Tornado Cash" as the reason for his arrest.

Meanwhile, pushback is growing against sanctioning the source code. For example, cryptography professor Mathew Green of Johns Hopkins University has put the software back online, and Tether continues to stick to its habit of not freezing funds.