Cryptocurrency Market News: Tornado Cash Developer Sentenced to Over 5 Years in Prison

This past week, a major conviction occurred in a crypto technology case, as a developer of privacy-preserving software was convicted for money laundering in the Netherlands. The CEO of digital asset manager Grayscale also resigned, and a report suggested the crypto industry could have a bigger political impact than ever through lobbying efforts.

Tornado Cash Developer Alexey Pertsev Sentenced to Over 5 years in Prison

Tornado Cash 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, to Aug. 10, 2022, Pertsev consistently engaged in money laundering, and ignored suspect origins of illicit transactions on Tornado Cash.

Following the verdict, the 31-year-old Russian was taken into custody. Pertsev can appeal the sentence, but the time he has already spent in detention since his arrest in August 2022 will not be deducted from his prison term.

The case may influence upcoming trials of other Tornado Cash developers, including Roman Storm and Roman Semenov, who also face money laundering and sanctions violations charges in the U.S.

Grayscale CEO Michael Sonnenshein Steps Down

Grayscale CEO Michael Sonnenshein is stepping down, according to a release Monday. The company said Sonnenshein, who played a key role in the 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 over the role on August 15. Mintzberg brings over 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 parent Digital Currency Group, praised Sonnenshein's leadership in transforming the Bitcoin Trust into an ETF. Earlier this year, Grayscale was among the firms that successfully listed a spot Bitcoin ETF in the U.S. after challenging repeated denials by the Securities and Exchange Commission (SEC).

Crypto Industry Ramps Up Lobbying Efforts

The crypto industry is ramping up its lobbying efforts in Washington, aiming to influence the upcoming U.S. elections, CoinDesk reported.

By investing heavily in pro-crypto candidates, the industry is hoping to make progress in establishing a more favorable regulatory framework. Notably, crypto-focused political action committees (PACs) like Fairshake have raised substantial funds to support candidates sympathetic to crypto. These efforts have already impacted key races, reportedly helping thwart the re-election of Congresswoman Katie Porter, who has been critical of crypto.

Fairshake also contributes to party-affiliated PACs like Defend American Jobs and Protect Progress, and supports both Republican and Democratic candidates who back crypto-friendly policies.

What To Expect in the Markets This Week

U.S. lawmakers are preparing for a vote on the Financial Innovation and Technology for the 21st Century Act (Fit21), deemed crucial by major crypto companies for the future of the U.S. crypto industry.

Fit21 aims to establish safeguards against risky behavior and ensure consumer protection in cryptocurrency custody and bankruptcy, providing clearer guidelines for the industry. The upcoming 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 advocating for the bill, emphasizing the importance of the legislation for supporting the growth of digital assets and maintaining U.S. leadership in financial innovation.