The Arbitrum DAO is currently holding a vote to provide financial support for the legal defense expenses of Tornado Cash’s developers. If approved, the community would contribute up to 600,000 ARB tokens, equivalent to almost $1.3 million at the time of writing, in the first year.
The proposal, put forward by a delegate known as DK on March 7th, aims to secure a “strong legal defense” for Roman Storm and Alexey Pertsev, the minds behind the crypto mixer Tornado Cash. Additionally, the funds could be utilized for public relations and advocacy initiatives to raise awareness about privacy-preserving technologies and the legal challenges faced by developers.
The proposal outlines three voting tiers with different funding levels, ranging from 200,000 to 600,000 ARB tokens. As of now, more than 80% of the votes have been cast in favor of the highest funding tier. Voting will remain open until March 14th.
The allegations against Tornado Cash and its founders revolve around claims that the platform facilitated the laundering of over $1 billion in illicit funds, including money connected to the North Korean hacking group Lazarus Group. Consequently, Tornado Cash has faced significant legal actions, including being added to the United States sanctions lists. This action effectively bans residents of the country from using the service and has sparked controversy within the cryptocurrency community.
Supporters of Tornado Cash argue that the platform simply provides software for decentralized money transmission and does not directly engage in money transmission itself. This challenges the basis of the charges against its developers. According to the crypto advocacy group Coin Center, the guidelines from the Financial Crimes Enforcement Network (FinCEN) state that an anonymizing software provider should not be considered a money transmitter.
Storm and Pertsev are facing multiple charges from U.S. authorities, including conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money-transmitting business. The first two charges carry a maximum sentence of 20 years in prison each, while operating an unlicensed money-transmitting business is punishable by up to five years in prison.
The community’s proposal comes shortly after the crowdfunding platform GoFundMe terminated a fundraiser dedicated to collecting legal fees for Storm and Pertsev. GoFundMe cited a violation of their terms of service that could potentially expose the platform, its employees, or users to harm or liability of any kind.
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