Ethereum News Today: Ethereum Foundation Backs Tornado Cash Founder's Legal Defense Amid DeFi Regulatory Debate

Generated by AI AgentCoin World
Friday, Aug 8, 2025 6:51 am ET1min read
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Aime RobotAime Summary

- Ethereum Foundation backs Tornado Cash co-founder Roman Storm's legal defense after his New York conviction for unlicensed money transmission services.

- Vitalik Buterin highlights concerns over legal precedents, as Storm faces potential decades in prison for facilitating $1B+ illicit transactions linked to North Korea.

- DeFi community debates liability of open-source developers, with advocates arguing noncustodial code shouldn't equate to custodial financial services under current regulations.

- The case sparks global regulatory scrutiny of decentralized finance, as crypto supporters rally to fund Storm's appeal and protect privacy-focused technologies.

The

Ethereum
Foundation has pledged support for the legal defense of Tornado Cash co-founder Roman Storm, following his conviction in New York for operating an unlicensed money transmission service [1]. The decision underscores the broader concerns within the decentralized finance (DeFi) community about the legal risks developers face when creating open-source software. This backing was amplified by Ethereum co-founder Vitalik Buterin, signaling significant concern over the potential precedent set by the case [1].

Storm was found guilty on counts related to running an unlicensed financial operation, though jurors could not reach a consensus on money laundering and sanctions-related charges [1]. Prosecutors have accused him of facilitating over $1 billion in illicit transactions, including funds allegedly linked to North Korea’s Lazarus Group [1]. His defense team has announced plans to appeal the verdict, citing the potential for years or even decades in prison should the appeal fail [1].

Supporters argue that the case raises complex legal and ethical questions, particularly about whether writing open-source code can be equated with managing a custodial financial service [1]. Advocacy groups, such as Free Pertsev & Storm, emphasize that developers should not be held liable for how third parties use noncustodial, peer-to-peer software [1]. This has sparked a larger debate about the role of regulatory frameworks in the DeFi ecosystem and the rights of software creators in a rapidly evolving digital economy.

As the legal battle progresses, the fundraising effort to support Storm’s defense has gained momentum within the crypto community [1]. Many view the case as a pivotal moment for privacy-focused technologies and the future of decentralized finance, with potential implications for how open-source tools are regulated globally [1].

Source: [1] Ethereum Foundation Steps In to Back Tornado Cash Co-Founder’s Legal Fight (https://coinmarketcap.com/community/articles/6895d2cdfbf0d76ec0d0a709/)