Ethereum News Today: Ethereum, Keyring Fund Tornado Cash Defense Amid Legal Clash Over Code Liability

The Ethereum Foundation and Keyring Network have launched a joint initiative to fund the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev using fees from Keyring's zero-knowledge DeFi vaults. The program, which began in August 2025, allocates the first two months of protocol fees from Keyring's zkVerified permissioned vaults to support the developers' legal efforts. As of late August, the initiative had raised over $22,000, according to theblock.co Ethereum Foundation and Keyring Launch Legal Defense Fund for Tornado Cash Developers^[2]. Keyring, a provider of privacy-focused DeFi tools, specializes in zero-knowledge proofs to enable compliant access to decentralized finance for institutional investors. The Ethereum Foundation serves as a strategic partner, coordinating the effort to establish a sustainable, market-driven funding model Ethereum Foundation Launches Joint Initiative to Fund Tornado Cash Legal Defense^[1].

The initiative aligns with broader industry concerns over criminalizing open-source code. Tornado Cash, a decentralized privacy protocol, was sanctioned by the U.S. Treasury in 2022 for its alleged role in laundering over $7 billion in cryptocurrency, including funds linked to North Korean hackers. Developers Roman Storm and Alexey Pertsev were arrested in 2022 and 2024, respectively, and face charges including money laundering and operating an unlicensed money-transmitting business. The Ethereum Foundation previously pledged $500,000 to their defense, and the new model aims to create a recurring funding mechanism rather than relying on one-time donations Ethereum Foundation Launches Joint Initiative to Fund Tornado Cash Legal Defense^[1].

Keyring's CEO, Alex McFarlane, emphasized the initiative's potential as a proof-of-concept for crypto-based public goods funding. By linking the growth of privacy protocols with legal protection for developers, the model seeks to reduce operational and legal overhead in fundraising. Vinay Vasanji, head of the Ethereum Foundation's Strategic Funding Coordination team, noted that traditional businesses often donate a fraction of revenue to charitable causes, but blockchain's "openly capitalistic" nature enables real-time donations without altering user incentives Crypto Funding Is Broken. Can This New Plan to Help the Tornado Cash Developers Work?^[3].

Legal challenges against Tornado Cash developers remain unresolved. Roman Storm was convicted of operating an unlicensed money-transmitting business in August 2025, while Alexey Pertsev is appealing a 2024 Dutch conviction. The U.S. Department of Justice has shifted its stance, with acting assistant attorney general Matthew Galeotti stating that "writing code is not a crime." However, courts continue to debate whether developers can be held liable for third-party misuse of decentralized tools .

The initiative reflects growing industry support for privacy-preserving technologies. Prominent crypto advocates, including the Solana Policy Institute and Ethereum co-founder Vitalik Buterin, have contributed to the developers' legal defense. The Ethereum Foundation and Keyring hope the model will inspire similar efforts, ensuring sustainable funding for privacy protocols amid regulatory uncertainty Ethereum Foundation Launches Joint Initiative to Fund Tornado Cash Legal Defense^[1].