The Netherlands is increasingly becoming a worldwide legal disgrace, particularly in the realm of financial crime. The Dutch judicial system appears to be fundamentally flawed and biased, as evidenced by the comparative analysis of the Tornado Cash and Payvision cases. Dutch prosecutors investigated both cases. One was settled out of court and one was tried. This disparity underscores a failure or even an abuse of the Dutch judicial system.
Payvision: A Case of Gross-Negligent Leniency
Payvision, a payment processor founded by Rudolf Booker in Amsterdam, primarily operated in the high-risk sectors of porn and online gambling. However, its activities extended far beyond these areas, systematically supporting illegal businesses with little regard for KYC (Know Your Customer) procedures. Payvision‘s money laundering and cybercrime facilitating activities were notorious, with the company serving as a payment processor for vast cybercrime organizations:
- Veltyco Group PLC (now B90 Holdings PLC), a cybercrime empire masterminded by German cybercriminal Uwe Lenhoff. This empire defrauded tens of thousands of victims, laundering a significant portion of the stolen funds through Payvision. Lenhoff was arrested in 2019 and died in prison 2020.
- E&G Bulgaria, a cybercrime empire led by Israeli cybercriminals Gery Shalon and Gal Barak, which collapsed with the arrest of Bark in 2019. Barak was convicted in 2020 for investment fraud and money laundering and had to serve prison time. His lieutenants have also been sentenced to prison time and restitution payments.
Despite the extensive and systematic nature of Payvision’s money laundering operations, the repercussions for the responsible CEO, Rudolf Booker, were laughable. Following a criminal complaint filed by the Dutch DNB in 2020, Booker received a trivial fine despite having profited immensely from the sale of Payvision to ING for €375 million in 2018.
The increased valuation of Payvision, driven by its money laundering activities, highlights Booker’s intent for personal enrichment. Even after the sale, ING discovered the depth of Payvision’s illicit activities, leading to the company’s dissolution by the end of 2021.
The criminal records unequivocally show that Booker and Payvision’s management were aware of their clients’ fraudulent transactions. Intercepted communications clearly indicate Booker’s deliberate circumvention of KYC procedures, evidencing his intent. Despite these damning facts, the judicial response was nothing short of a slap on the wrist.
Tornado Cash: A Case of Excessive Punishment
In stark contrast, the treatment of Alexey Pertsev, a Russian software developer involved with Tornado Cash, reveals a harsh and disproportionate judicial approach. Tornado Cash, a cryptocurrency mixer, was sanctioned by OFAC in August 2022 for allegedly facilitating the laundering of over $1.2 billion in illicit funds. Pertsev was arrested in the Netherlands in connection with these allegations and remained in custody until his trial in March 2024.
Despite arguing that he could not be held responsible for others’ misuse of Tornado Cash, Pertsev was sentenced to 64 months in prison. His pre-trial detention does not count towards this sentence. The Dutch court’s refusal to grant bail during his appeal process further exacerbates the severity of his treatment. The judges argued that the developers should have designed the protocol to prevent its abuse, a notion that challenges the foundational principles of open-source software.
A Comparative Injustice: The Failing Prosecutors
The juxtaposition of these cases reveals a glaring inconsistency in the Dutch judicial system. On the one hand, Rudolf Booker, who intentionally facilitated money laundering and fraud and enriched himself immensely, received a minor fine. On the other, Alexey Pertsev, who arguably had no control over the actions of Tornado Cash users, faces years in prison. This discrepancy raises serious questions about the fairness and impartiality of Dutch judicial proceedings.
Booker’s actions defrauded tens of thousands of retail investors, many of whom lost their life savings. Payvision’s role extended beyond money laundering to actively contributing to fraud. Booker’s lenient punishment sends a dangerous message, effectively encouraging money laundering and cybercrime facilitation.
Conversely, Pertsev’s severe punishment appears rooted more in his nationality and association with a sanctioned entity than in a fair assessment of his actions. Unlike Payvision, Tornado Cash did not directly defraud retail investors, yet Pertsev faces a harsher penalty than Booker.
It is a shame that the Dutch public prosecutor’s office has not brought charges against Payvision and Booker. It is possible that a court would have handed down similarly strong sentences as in the Pertsev case. It did not come to that. At this point, it should be noted that the Dutch public prosecutor’s office has also been delaying an indictment that was to be brought against the former CEO of ING, Ralph Hamers, for money laundering for years—the very same Hamers, who was responsible for the acquisition of Payvision.
Conclusion: A Call for Justice
We are not arguing that Tornado Cash is harmless or that money laundering is not criminal. On the contrary, we are arguing that money laundering is criminal but that all perpetrators should be treated equally. That is the job of the judiciary.
However, the treatment of Rudolf Booker and Alexey Pertsev epitomizes a profound failure in the Dutch judicial system. The leniency shown towards Payvision’s blatant criminal activities contrasts sharply with the draconian measures imposed on Pertsev. This disparity undermines the credibility of the Dutch legal system and highlights a potential abuse of judicial power.
The Netherlands must address these inconsistencies to restore faith in its legal processes. Without significant reform, the Dutch judicial system will continue to be perceived as biased, ineffective, and a global disgrace in the fight against financial crime.
