Markets
Developer Tornado Cash sentenced to more than 5 years in prison
Key Takeaways
- Tornado Cash developer Alexey Pertsev has been convicted 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 spot Bitcoin exchange-traded funds, is stepping down, with Goldman Sachs’ Peter Mintzberg set to take over the role.
- The crypto industry is reportedly stepping up its lobbying efforts in Washington, with the aim of influencing the upcoming US elections.
- US lawmakers are expected to soon vote on a bill that leading crypto firms, including Coinbase, say could be crucial to the future of the crypto industry in the US.
Last week saw a major conviction in a cryptographic technology case when a developer of privacy-preserving software was convicted of money laundering in the Netherlands. The CEO of digital asset manager Grayscale also resigned, and a report suggested that the crypto industry could have a greater political impact than ever before through lobbying efforts.
Tornado Cash developer Alexey Pertsev sentenced to more than 5 years in prison
Tornado Money developer Alexey Pertsev was reportedly convicted of money laundering by a Dutch judge on Tuesday and received a 64-month prison sentence.
An indictment revealed that between July 9, 2019 and August 10, 2022, Pertsev consistently engaged in money laundryand ignored suspected sources of illicit transactions on Tornado Cash.
After the verdict, the 31-year-old Russian was taken into custody. Pertsev can appeal his sentence, but the time he has already spent in detention since his arrest in August 2022 will not be deducted from his prison sentence.
The case could influence the upcoming trials of other Tornado Cash developers, including Roman Storm and Roman Semenov, who also face charges of money laundering and U.S. sanctions violations.
Grayscale CEO Michael Sonnenshein steps down
Grayscale CEO Michael Sonnenshein is stepping down from his role, according to a statement Monday. The company said that Sonnenshein, who played a key role in launch of spot Bitcoin exchange-traded funds (ETFs)is leaving the company to “pursue other interests”.
Goldman Sachs’ head of strategy for asset and wealth management, Peter Mintzberg, will take up the role on August 15. Mintzberg brings more than 20 years of experience from roles at BlackRock, OppenheimerFunds and Invesco. Until Mintzberg steps in, Grayscale CFO Edward McGee will serve as interim CEO.
Barry Silbert, CEO of Grayscale’s parent 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 US, after defying repeated denials of the Securities and Exchange Commission (SEC).
Crypto Industry Steps Up Lobbying Efforts
The crypto industry is stepping 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. Notably, with a focus on cryptography political action committees (PACs) like Fairshake have raised substantial funds to support crypto-friendly candidates. These efforts have already impacted key races, reportedly helping to prevent the re-election of Congresswoman Katie Porter, who has been critical of 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 from the markets this week
US lawmakers are preparing for a vote on the Financial Technology and Innovation for the 21st Century (Fit21) Act, considered crucial by leading crypto firms 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 by providing clearer guidelines for the industry. The next vote could also determine whether the Commodity Futures Trading Commission (CFTC) will become a major crypto regulator and delineate its jurisdiction from that of the SEC.
The Crypto Council for Innovation, which includes industry giants like Coinbase (COIN), Kraken and Andreessen Horowitz wrote a letter last week defending the bill, emphasizing the importance of the legislation to support the growth of digital assets and maintain the U.S. leadership in financial innovation.