Inside the Pertsev Prosecution: The Defiant's Investigators on Tornado Cash, DAOs and Media Money

At a moment when trust across the crypto industry is unusually low, one unresolved story stands out for its long-term implications: the prosecution of Tornado Cash developer Alexey Pertsev.

rekt.news first covered Pertsev's detention in August, noting he was taken into custody just two days after the US Treasury sanctioned Tornado Cash's code. Three months on, he had still not been formally charged, though prosecutors are now pursuing a money-laundering case — this despite research from Chainalysis indicating that most funds routed through the protocol were legitimate.

Several outlets have reported on the case, but a video documentary produced by The Defiant offered unusually deep coverage. rekt.news spoke with the team behind it to learn more about what they found.

01The investigation

Marvin of The Defiant explained that the team pursued the story because of its stakes for the trajectory of DeFi and concerns about government overreach — even though the arrest itself had drawn relatively little mainstream attention. The Dutch decision to detain a developer, Russian national Alexey Pertsev, without charge was, in his view, an extraordinary step for the Netherlands to take, and one authorities would be unlikely to take lightly. Yet public information was scarce: essentially a single government release tying Pertsev to Tornado Cash and money laundering, with officials declining further comment when The Defiant asked.

Digging further, the team found the narrative had split into two camps. Crypto-native commentators tended to portray Pertsev as an innocent open-source contributor motivated purely by privacy; mainstream outlets in the US and Netherlands more often framed him as party to a large money-laundering scheme. Marvin said the team suspected neither version captured the full picture, and set out to test that assumption.

Building adequate context proved to be one of the harder parts of producing the film, since a documentary about privacy tooling on Ethereum requires explaining unfamiliar concepts at nearly every turn. The arrest serves as the entry point, but the film ultimately widens into a broader look at debates over financial privacy, programming, free expression and the future of DeFi, built around four interviews and running up to the first day of trial — with a follow-up planned once further hearings occur.

02Scenes from the courtroom in Den Bosch

Describing the atmosphere at the trial, Marvin said it was largely subdued — notable partly because DeFi work is usually remote, so seeing community members converge in person in Den Bosch felt unusual. The mood was more visibly tense for Pertsev's wife, family and friends in attendance.

Among those present, per Marvin, were Eleonore Blannc of CryptoCanalCommunity, Jack Schickler of CoinDesk, reporters from mainstream Dutch broadcasters NOS and BNR, and a handful of people connected to the cypherpunk community.

The Defiant's team ended up seated a few rows behind Pertsev, near his wife Xenia. Marvin recounted Pertsev repeatedly glancing back to meet her eyes, at points placing a hand over his heart — the couple's first time seeing one another in more than three months. A court-appointed interpreter, an older Russian-speaking woman unfamiliar with crypto terminology, struggled to translate technical vocabulary like DAOs, blockchain and TORN tokens, often asking the prosecutor to slow down — meaning Pertsev received information with a lag compared to Dutch speakers in the room.

03On impartiality

Asked whether the team held personal views on how the case should be decided, and whether that made objectivity difficult, Marvin described the piece as a journalistic exercise: straying from impartiality would have undermined the reporting and invited backlash, which is part of why the film includes voices from both sides — among them a former Dutch official and a developer friend of Pertsev's.

On the Dutch proceedings specifically, Marvin said he did not yet have a firm opinion, since only a portion of the evidence had been heard and the defense had barely presented its side; he expected to have a clearer view after future sessions. On the US sanctions, however, he was more willing to take a position: he believes the courts should strike down OFAC's action, calling it an overreach that — if upheld — would embolden the agency to target other DeFi software in ways reminiscent of SEC Chair Gary Gensler's approach, with troubling implications for free expression. He said he was following Coin Center's legal challenge with that in mind.

04What didn't make the final cut

Marvin said material on how DAOs have drifted from their founding ideals was cut and may surface in a future project.

He also described an unusual episode from the trial: under the terms of his visa, Pertsev was required to demonstrate employment to avoid its revocation after more than three months without work — a threshold he had already passed while jailed. He was barred from returning to PepperSec, the company he co-founded with other core Tornado Cash developers, so needed employment elsewhere, which seemed like a long shot. When proceedings resumed after a recess, his lawyer, Keith Cheng, arrived late with what he described as a freshly printed employment contract from a Thailand-based company called Finstream, offering remote work and a path to a Dutch visa via a company called Expatrix. The arrangement looked hastily assembled, and it emerged that Finstream's owner was Petr Korolev — the same developer friend of Pertsev's the team had interviewed weeks before, prompting a knowing look between Marvin and colleague Alp when the name was read aloud.

The judges did not accept the arrangement as legitimate, and Pertsev remained in custody. Marvin suggested a stronger presentation might have given the defense a chance, though it still seemed unlikely to succeed. The practical consequence, he noted, is that Xenia may now have to leave the Netherlands and go an extended period without seeing her husband — a realization he said appeared to hit her as she cried at the trial's close.

05Is this a "war on code"?

Marvin resisted applying the phrase "war on code" to the Dutch government's conduct, reserving it instead for the US response, which he addressed separately.

In the Netherlands, he framed Pertsev's arrest as part of an existing campaign against money laundering rather than against code itself. He cited government estimates of roughly 16 billion euros laundered annually in the country, and noted that FIOD (the Fiscal Information and Investigation Service) has spent recent years pursuing laundering operations broadly — pointing to a recent RTL News piece on FIOD action against Amsterdam tourist shops that, despite apparently having few paying customers, manage to cover steep rents by ostensibly selling Nutella waffles and souvenirs.

Judith de Boer, a cybercrime and money-laundering lawyer interviewed for the film, told The Defiant that FIOD has directed extra resources at crypto-related laundering for years, dating back to roughly 2014 with so-called "Bitcoin cashers" who converted dark-web bitcoin proceeds into cash. Marvin noted that such cases were comparatively easy to prosecute because intent was often overt — in one instance, a suspect openly advertised an illegal exchange service on the dark web, effectively proving guilt.

Tornado Cash presented a harder case by comparison: it was built to enhance Ethereum privacy, had legitimate uses, and had no clear owner. Marvin said roughly the equivalent of a billion dollars moved through the protocol was linked to criminal activity — a small share of both global illicit finance and the Netherlands' overall laundering total, but apparently enough for authorities to want to draw a line before mixers like it became more widespread, and to discourage further development of similar tools. An EU-based lawyer of Russian descent, speaking anonymously, told The Defiant that Dutch authorities had been building a case against Pertsev for a long period but moved to arrest him only after the OFAC sanctions, fearing he might flee. The same source said the government's decision to hold him without charge for the maximum allowable period — more than 100 days — pointed to an ongoing effort to continue building the case while he remained detained.

Marvin's overall read: this isn't so much "the Dutch war on code" as the next stage of "the Dutch war on money laundering," with Tornado Cash and comparable mixers as the current target, and Pertsev's presence in the Netherlands giving prosecutors their opening. A conviction, he said, would establish precedent for holding mixer contributors and operators accountable even where legitimate uses exist.

He added that the trial's outcome remains uncertain, and that his level of concern would be different if Pertsev's only involvement had been contributing code — the framing many used before trial began. But early evidence, he said, suggested Pertsev had some role in directing Tornado Cash's operations through its DAO, was aware money laundering was occurring, and appeared to have benefited financially from protocol fees. That raises a further question, in his view, about how courts will treat DAO structures legally — since DAOs are often described as flat and decentralized but, in practice, frequently resemble corporate governance dominated by large token holders, which he said appeared true of the Tornado Cash DAO. He wondered whether this or a future trial might produce a ruling that the DAO label doesn't shield individuals from responsibility.

Returning to the original question, Marvin concluded this looks more like a developer facing consequences for enabling illegal activity than a war on code per se — an attempt to deter others from building tools that facilitate laundering, rather than a broader assault on open-source software.

He reserved "war on code" for the US government's actions instead, arguing that OFAC's sanctions exceed its statutory authority: OFAC can only sanction the assets, entities or property of foreign persons, and Tornado Cash is none of these. He noted the sanctions largely ended up affecting Americans who interacted with the protocol's immutable smart contracts — an interpretation of OFAC's authority that, per Peter van Valkenbergh, marks a significant departure from precedent, effectively targeting software rather than foreign assets. Marvin questioned what would prevent similar sanctions being applied to other open-source projects, citing Linux as an example.

He also flagged the broader need for a decentralized, censorship-resistant home for open-source code, pointing to GitHub — owned by Microsoft — suspending Tornado Cash developer accounts as a warning sign. While stopping short of alleging direct collusion with the government, he noted Microsoft's defense-contracting relationships give it a financial incentive to accommodate official pressure, which he considers a serious concern.

06Motives, privacy trade-offs, and free speech

Asked about a possible hidden motive behind the arrest, Marvin said the primary driver is clearly anti-money-laundering enforcement, but that a secondary motive may be the government signaling — through a high-profile example — that it can't keep pace with the technology, and wants to discourage developers from acting without constraint.

On balancing on-chain privacy against abuse by actors such as North Korea, which is known to have used Tornado Cash, Marvin said he doesn't yet have a confident answer, despite grappling with the question throughout production; he speculated that zkSNARKs could play some role in an eventual solution.

On the durability of free-speech protections for open-source code, Marvin pointed to First Amendment protections upheld repeatedly by the US Supreme Court, and noted that American courts this year upheld the right to publish open-source code for 3D-printed firearms in Defense Distributed v. US Department of State — a precedent he sees as reinforcing protection for code with no malicious purpose. He cautioned, though, that if a future Supreme Court case eroded those protections, it would threaten publication rights well beyond this case, including commentary on DeFi itself.

07SBF, The Block, and the business of crypto media

The conversation then turned to Sam Bankman-Fried's arrest roughly two months after FTX's collapse, and revelations about how far his influence had extended across the industry — including reports that he had funneled customer funds into PR efforts, and had extended personal loans to the owner of crypto outlet The Block.

Camila, also of The Defiant, said she was genuinely surprised to learn of SBF's financial leverage over The Block, which she regards as one of the more professional outlets in the space; discovering it had been secretly financed by a major industry figure it covered was, in her view, a clear conflict of interest.

She noted that outside funding isn't inherently the problem — outlets backed by billionaires, conglomerates or funds can still maintain professional standards. What troubles her are the unanswered questions: why the loans weren't disclosed, why personal loans were made to the outlet's owner, and what SBF received in return. She added that it was notable even The Block's own team was caught off guard, given their track record for strong scoops, but expressed confidence the outlet would recover.

More broadly, Camila argued the episode underscores the need for independent, fact-based crypto journalism, contrasting it with what she described as widespread PR-driven content pushed by projects and their venture backers — content that makes an already difficult space harder for users and investors to navigate. She framed data-driven, transparent reporting as essential to the industry living up to its promise, calling it a founding principle of The Defiant.

Asked whether SBF or anyone else had pitched The Defiant a similar arrangement, Camila said no one had offered anything close to that scale, joking that she hadn't been offered Bahamas real estate. She said PR firms and projects regularly request paid editorial coverage, which The Defiant declines as a matter of policy — sponsorships are disclosed and treated as advertising, while editorial coverage is never paid for and is chosen purely on newsworthiness. She also said she personally declines offers to promote projects via her own Twitter account, noting that the volume of such offers shows how normalized the practice has become — something she considers unacceptable given it amounts to disguising advertising as journalism. She acknowledged the outlet forgoes some short-term revenue as a result, but views its reputation and audience trust as worth more over time.

08Disclosure, holdings, and the limits of neutrality

On how crypto journalism should handle bias tied to personal holdings — and whether disclosure alone is sufficient — Camila said The Defiant is still developing a formal investment policy for its editorial staff that would go beyond disclosure requirements.

She recalled that at Bloomberg, where she previously worked, reporters were barred from holding assets in sectors they covered — a standard she held onto until she began covering DeFi, where using the protocols directly is often necessary to report on them credibly. Given that reporters effectively need exposure to do the job, she said disclosure is a baseline but likely insufficient on its own.

She raised the further question of whether holdings should be capped — for instance, whether a reporter covering MakerDAO should hold the bulk of their savings in MKR — suggesting that wouldn't serve good reporting, though such rules are easier to apply at larger outlets with narrowly defined beats than at The Defiant, where reporters cover a wide range of topics. She floated the idea of capping any single token at a percentage of a reporter's total holdings.

A further complication, she said, is how to treat assets that function as a reserve currency for the ecosystem — arguing BTC and ETH arguably occupy something close to that role, much as it would be unreasonable to cap a reporter's holdings of their home country's fiat currency. Whether the same logic should extend to BTC and ETH, she said, remains an open question for her.

09Closing note

Engagement across the industry may be down and prices depressed, but crypto-related arrests are not slowing. Journalists and lawyers alike face a busy period ahead as they work through the unresolved questions raised at the intersection of crime and code — leaving open whether this alternative financial system is proving any less corrupt than the one it was meant to replace.