Arbitrum DAO Withdraws Proposal to Donate $1.28M to Tornado Cash Developers’ Legal Defense Amid Legal Concerns

Arbitrum banner and a donation button

Arbitrum DAO has retracted a proposal to contribute approximately $1.28 million worth of ARB tokens to assist Tornado Cash developers Roman Storm and Alexey Pertsev in their legal battle. The decision came after token holders expressed apprehensions about potential legal ramifications associated with such donations.

Potential Legal Risks of a Donation

Arbitrum DAO, a decentralized autonomous organization, has reversed its decision to allocate approximately $1.28 million worth of ARB tokens to support the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev. The move comes in response to concerns raised by token holders regarding potential legal risks associated with such contributions.

The initial proposal, put forth by Arbitrum contributor Joseph Axisa, aimed to pledge between 200,000 and 600,000 ARB tokens (equivalent to $400,000 to $1.2 million) to a legal defense fund for Storm and Pertsev. The developers are currently facing criminal charges related to their involvement with Tornado Cash, a smart contract protocol designed to enhance privacy in Ethereum transactions.

Removed At Author’s Request

The proposal suggested directing the funds to WeWantJusticeDAO’s crowdfunding campaign, which supports Storm and Pertsev’s substantial legal expenses, estimated at approximately $100,000 per month. The intended donation was to be held on the Juicebox platform, a crypto-focused fundraising platform.

However, as of Friday, March 8, the proposal was no longer visible on Arbitrum’s discourse forum. An Arbitrum representative confirmed that the post was removed at the request of its author, Joseph Axisa.

Support from DeFi Community

Despite the withdrawal of the initial proposal, members of ArbitrumDAO are exploring alternative avenues to finance the legal battles of Storm and Pertsev. One option under consideration is to contribute funds to Coin Center, a non-profit organization specializing in crypto policy.

Since their arrests, Storm and Pertsev have received significant support from the decentralized finance (DeFi) community, which values the principles of financial freedom embodied by projects like Tornado Cash. However, the potential legal implications of large-scale donations to support the developers’ legal defense remain uncertain.

Compliance Issues

In a related development, crowdfunding efforts for Storm’s legal aid faced a setback last month when GoFundMe shut down a fundraising campaign citing concerns about the campaign’s compliance with its terms of service.

The decision by Arbitrum DAO to withdraw its proposed donation underscores the complexities and legal uncertainties surrounding financial support for individuals involved in legal disputes within the crypto space.

Author: Jinka

Jinka is a self-trained crypto journalist, passionate about happenings in the industry.