Arbitrum DAO is Voting to finance the legal defense expenses of Tornado Cash’s developers. The DAO would donate up to 600,000 ARB tokens in the first year if the proposal is approved.
Pseudonymous delegate DK submitted a proposal on March 7 seeking funding for a “robust legal defense” against the developers of the cryptocurrency aggregator Tornado Cash, Roman Storm, and Alexey Pertsev.
Furthermore, the allocated funds might be instrumental in supporting public relations and advocacy initiatives that aim to raise awareness regarding the legal ramifications for developers and privacy-preserving technologies.
“By rallying support for their legal fund, we aim to safeguard not only the future of privacy-preserving technologies but also the broader principles of innovation, decentralization, and individual sovereignty within our industry.”
The proposition establishes three voting categories after a 600,000 to 200,000 ARB funding range. The highest tier has received over 80% of the ballots cast. The voting deadline is March 14.
The allegations against Tornado Cash and its founders pertain to the purported involvement of the platform in the laundering of more than $1 billion in illicit funds, which allegedly included funds associated with the Lazarus Group, a North Korean cybercrime group.
Subsequently, Tornado Cash has encountered substantial legal repercussions, such as its inclusion in sanctions lists of the United States. This prevents U.S. citizens from utilizing the service and has incited contention among cryptocurrency community members.
Advocates of Tornado Cash contend that the platform solely offers software for decentralized monetary transfer and does not participate in the transfer of funds itself, thereby contesting the foundation of the allegations levied against its developers.
According to the crypto advocacy group Coin Center, the Financial Crimes Enforcement Network (FinCEN) guidelines state that an anonymizing software provider should not be deemed a money transmitter.
U.S. authorities have levied multiple allegations against Storm and Pertsev, including conspiracy to launder money, conspiracy to violate sanctions, and conspiracy to operate an unlicensed money-transmitting business.
The maximum sentence for the initial two charges is twenty years in prison. In contrast, the charge about the operation of an unlicensed money-transmitting enterprise carries a penalty of five years in prison.
“These [legal] challenges not only threaten the developers’ ability to continue their work but also undermine the fundamental principles of decentralization and individual freedom upon which projects with privacy-preserving technologies are built.”
Just a few days before the community proposal, GoFundMe, a crowdfunding platform, canceled a campaign to collect legal fees for Storm and Pertsev, citing a violation of their terms of service that “could expose GoFundMe, its employees or Users to any liability or harm of any kind.”
