Arbitrum DAO votes on $1M fund for legal defense of Tornado Cash devs
Arbitrum DAO is voting to fund Tornado Cash developers' legal defense costs. If approved, the community will donate up to 600,000 ARB tokens in the first year, which is worth nearly $1.3 million as of this writing.
A March 7 proposal by anonymous representative DK seeks to fund a “robust legal defense” for Roman Storm and Alexey Persev, the developers behind crypt mixer Tornado Cash. In addition, the funds may be used for public relations and advocacy efforts to promote awareness around privacy protection technologies and legal burdens on developers.
“By raising support for the Legislature Fund, we aim to protect not only the future of privacy-preserving technologies, but also the broader principles of industry, decentralization, and individual sovereignty.”
The proposal would establish three tiers for voting in different funding levels ranging from 200,000 to 600,000 ARB. So far, over 80% of the votes have been cast for the top spot. The voting deadline is March 14.
The indictment against Tornado Cash and its founders revolves around the platform's role in laundering more than $1 billion in illicit funds, including funds linked to the North Korean hacking organization Lazarus Group. As a result, Tornado Cash was added to the US sanctions list, banning residents of the country from effectively using the service, and causing controversy in the cryptocurrency community.
Proponents of Tornado Cash argue that the platform only provides software to distribute decentralized funds and does not directly engage in money transfers, which challenges the basis of the lawsuit against the developers. According to crypto advocacy group CoinCenter, Financial Crimes Enforcement Network (FinCEN) guidelines state that an anonymous software provider should not be considered a money transmitter.
Storm and Perceive face multiple charges from US authorities, including money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unauthorized money transmitter business.
The first two counts each carry a sentence of 20 years in prison, while the charge of operating a money transmitter business without a license carries a sentence of up to five years.
“These [legal] Challenges not only threaten the ability of developers to continue their work, but also undermine the fundamental principles of decentralization and the principles of individual freedom upon which technologies that protect personal privacy are built.
The community's proposal comes just days after crowdfunding platform GoFundMe canceled a fundraiser to collect legal fees for Hurricane and Perceive, saying it violated its terms of service and “may expose GoFundMe, its employees or users to any damages or liability of any kind.”
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