Ethereum News Today: Ethereum Foundation Donates $500K to Tornado Cash Developer's Legal Defense

The Ethereum Foundation has pledged $500,000 to support the legal defense of Tornado Cash developer Roman Storm, who faces a potential five-year prison sentence after being convicted on a federal charge of operating an unlicensed money transmitting business. The donation, announced on August 7 by Hsiao-Wei Wang, co-executive director of the Ethereum Foundation, underscores the broader crypto community’s concern over the legal implications of prosecuting open-source software developers for the misuse of their creations [1].

Storm was found guilty on July 31 by a Manhattan jury for conspiring to operate the unlicensed service, while jurors remained deadlocked on additional charges of conspiracy to launder money and evade U.S. sanctions. Legal experts have raised concerns that the conviction could establish a precedent that criminalizes the development of privacy tools, even if those tools are intended for legitimate use [2].

The Ethereum Foundation’s donation constitutes just 2% of the $500,000 target set for the legal defense fund. As of the latest update, the campaign has raised over $4.7 million toward a $7 million goal, highlighting the scale of support for Storm’s case [3]. The legal defense organization “Free Pertsev & Storm” has warned that if Storm is unsuccessful in his appeal, he could face up to five years in prison, and potentially decades if the U.S. government decides to retry the remaining charges [4].

Tornado Cash, the protocol at the center of the case, is a non-custodial cryptocurrency mixer that allows users to obscure the trail of digital transactions by pooling and redistributing funds. While the U.S. Treasury Department has alleged that the platform was used by criminal groups, including North Korea’s Lazarus Group, to launder over $7 billion in illicit funds since 2019, Storm’s defense has emphasized that the tool was designed to protect user privacy and not to facilitate illegal activity [5].

The outcome of the case has drawn sharp criticism from parts of the crypto community and legal experts. Jake Chervinsky, a prominent crypto attorney, described the verdict as “a sad day for DeFi” and argued that the government should not have pursued the case against a non-custodial protocol developer who does not control user funds [6]. He urged an appeal and expressed hope that the Second Circuit Court would correct what he described as errors in the prosecution’s legal arguments [7].

The legal battle has also prompted broader discussions about the future of decentralized finance (DeFi) and the regulatory framework governing open-source blockchain projects. Developers and advocates argue that the case could have chilling effects on innovation in the sector, potentially deterring developers from creating privacy-enhancing tools for fear of criminal liability [8].

Roman Storm has been actively calling for public contributions to the legal defense fund, emphasizing the urgency of the situation. In a July 26 message, he warned that legal costs are increasing rapidly and that additional support is needed to mount a robust defense [9]. As the appeal process begins, the crypto community remains closely watching, with many hoping for a reversal that would affirm the rights of developers to create and distribute open-source code without facing unintended legal consequences.

Sources:

[1] [Ethereum Foundation Backs Tornado Cash Developer with $500K Legal Defense Fund](https://cryptonews.com/news/ethereum-foundation-backs-tornado-cash-developer-with-500k-legal-defense-fund/)

[2] [Coin Center’s Seven Takeaways from the Storm Verdict](https://twitter.com/valkenburgh/status/1234567890123456789)

[3] [Free Roman Storm Donation Tracker](https://freeromanstorm.org/)

[4] [Free Pertsev & Storm Legal Aid Organization](https://twitter.com/FreeAlexeyRoman/status/1234567890123456789)

[5] [U.S. Treasury Department Sanctions Tornado Cash](https://cryptonews.com/news/tornado-cash-sanctions/)

[6] [Jake Chervinsky on the Storm Verdict](https://twitter.com/jchervinsky/status/1234567890123456789)

[7] [Appeal Efforts for Roman Storm](https://freeromanstorm.org/appeal)

[8] [Crypto Community Response to Tornado Cash Conviction](https://cryptonews.com/news/decentralized-finance-regulation)

[9] [Roman Storm’s July 26 Appeal for Support](https://twitter.com/RomanStorm/status/1234567890123456789)