Arbitrum DAO Drops Proposal to Fund Tornado Cash Devs’ Legal Bills

The Arbitrum DAO has decided to withdraw a proposal that sought to provide financial support for the legal defense costs of Tornado Cash’s developers. The proposal aimed to allocate around $1.3 million worth of ARB tokens from the community wallet to assist Roman Storm and Alexey Pertsev, the creators of the crypto mixer Tornado Cash. Along with legal defense, the budget could also be utilized for public relations and advocacy efforts to promote privacy-preserving technologies. The proposal was put forward by a delegate known as DK on March 7, who emphasized the necessity of a strong legal defense for the developers. The proposal was subsequently deleted at the request of the author, although the reasons behind this decision remain unknown. DK has yet to respond to inquiries from .

Tornado Cash and its founders have faced allegations that the platform facilitated the laundering of more than $1 billion in illegal funds, including money associated with the hacking organization Lazarus Group. The developers have been charged by the United States with offenses such as money laundering, violating sanctions, and operating an unlicensed money transfer business. While Pertsev was arrested in the Netherlands in August 2022, Storm was apprehended by the Federal Bureau of Investigation in August 2023. The third co-founder, Roman Semenov, is still evading arrest. Supporters of Tornado Cash argue that it merely provides software for decentralized money transmission and is not directly involved in money transfers.

The crackdown on Tornado Cash has raised concerns among developers working on applications focused on enhancing privacy. These developers view the actions against Tornado Cash as a potential threat to their work. The legal battles faced by the Tornado Cash creators have resulted in significant financial setbacks. A fundraising campaign on GoFundMe, which aimed to collect funds for Storm and Pertsev’s legal fees, was canceled on February 16 due to a violation of GoFundMe’s terms of service that could expose the platform to harm or liability.

The Arbitrum DAO’s decision to retract the proposal seeking funding for the legal defense costs of Tornado Cash’s developers highlights the complex and contentious nature of the situation. The allegations against Tornado Cash and its founders, along with the legal consequences they have faced, have significant implications not only for the developers but also for the broader privacy-oriented application development community.

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