Markets
Tornado Cash developer sentenced to more than 5 years in prison
Key takeaways
- Tornado Cash developer Alexey Pertsev has been found guilty of money laundering by a Dutch judge, in a case that could have implications for others.
- Grayscale CEO Michael Sonnenshein, who played a key role in launching Bitcoin spot exchange-traded funds, is stepping down, and Goldman Sachs’ Peter Mintzberg is set to take over the role.
- The crypto industry is reportedly stepping up its lobbying efforts in Washington, aiming to influence the upcoming US elections.
- US lawmakers are expected to soon vote on a bill that major crypto companies including Coinbase say could be crucial to the future of the US crypto industry.
Last week saw a major conviction in a crypto technology case, when a privacy-preserving software developer was found guilty of money laundering in the Netherlands. The CEO of digital asset manager Grayscale has also resigned and a report suggests the crypto industry could have a greater political impact than ever thanks to lobbying efforts.
Alexey Pertsev, developer of Tornado Cash, sentenced to more than 5 years in prison
Tornado Cash Developer Alexey Pertsev was reportedly convicted of money laundering by a Dutch judge on Tuesday and sentenced to 64 months in prison.
An indictment revealed that between July 9, 2019 and August 10, 2022, Pertsev consistently engaged in money launderingand ignored the suspicious origins of illicit transactions on Tornado Cash.
Following the verdict, the 31-year-old Russian was taken into police custody. Pertsev can appeal the conviction, but the time he has already spent in custody since his arrest in August 2022 will not be deducted from his prison sentence.
The case could influence upcoming trials of other Tornado Cash developers, including Roman Storm and Roman Semenov, who also face charges of money laundering and sanctions violations in the United States.
Grayscale CEO Michael Sonnenshein resigns
Grayscale CEO Michael Sonnenshein is resigning, according to a statement released Monday. The company said Sonnenshein, which played a key role in the launch of spot Bitcoin exchange-traded funds (ETFs)leaves the company to “pursue other interests”.
Peter Mintzberg, head of asset and wealth management strategy at Goldman Sachs, will take up his role on August 15. Mintzberg brings more than 20 years of experience from BlackRock, OppenheimerFunds and Invesco. Pending Mintzberg’s intervention, Grayscale CFO Edward McGee will serve as interim CEO.
Barry Silbert, CEO of Grayscale parent company Digital Currency Group, praised Sonnenshein’s leadership in transforming the Bitcoin Trust into an ETF. Earlier this year, Grayscale was among the companies that successfully listed a spot Bitcoin ETF in the United States after challenging repeated refusals of the Securities and Exchange Commission (SEC).
Crypto Industry Steps Up Lobbying Efforts
The crypto industry is ramping up its lobbying efforts in Washington, aiming to influence the upcoming US elections, CoinDesk reported.
By investing heavily in pro-crypto candidates, the industry hopes to make progress in establishing a more favorable regulatory framework. Particularly focused on cryptography political action committees (PACs) like Fairshake have raised substantial funds to support crypto-friendly candidates. These efforts have already impacted key races, apparently helping to thwart the re-election of Congresswoman Katie Porter, who has criticized crypto.
Fairshake also contributes to party-affiliated PACs such as Defend American Jobs and Protect Progress, and supports Republican and Democratic candidates who support crypto-friendly policies.
What to expect in the markets this week
US lawmakers are preparing to vote on the Financial Innovation and Technology for the 21st Century (Fit21) Act, deemed crucial by major crypto companies for the future of the US crypto industry.
Fit21 aims to establish safeguards against risky behavior and ensure consumer protection in cryptocurrency custody and bankruptcy cases, providing clearer guidelines for the sector. The next vote could also determine whether the Commodity Futures Trading Commission (CFTC) will become a major crypto regulator and demarcate its jurisdiction from that of the SEC.
The Crypto Council for Innovation, which includes industry giants like Coinbase (PIECE OF MONEY), Kraken and Andreessen Horowitz, wrote a letter last week arguing in favor of the bill, emphasizing the importance of the legislation in supporting the growth of digital assets and maintaining U.S. leadership in financial innovation.