Arbitrum confirms removal of funding for Tornado Cash legal defense

Arbitrum confirms removal of funding for Tornado Cash legal defense - Industry News - News

Recent Developments in the Arbitrum DAO: Scrapping a Proposed Funding for Tornado Cash Developers

Background of the Controversial Proposal

The Arbitrum Decentralized Autonomous Organization (DAO) recently faced a significant decision when it came to a proposal that aimed to provide financial backing for the legal defense of Tornado Cash’s developers. The proposition suggested drawing almost $1.3 million in ARB tokens from the community reserves to support Roman Storm and Alexey Pertsev, individuals closely linked with Tornado Cash – a cryptocurrency mixer currently embroiled in legal troubles. The proposal extended to cover costs related to public relations and advocacy for technologies ensuring privacy.

The Unexpected Withdrawal of the Proposal

The proposal, which came to light on March 7, was put forward by an anonymous delegate named DK. The advocate for a strong legal defense for the implicated developers managed to garner attention and support from the community. However, in an unexpected turn of events, Arbitrum’s spokesperson announced that the forum was removed at the request of DK themselves.

“I can confirm that the forum was removed at the request of the author of the proposal,” stated the spokesperson. The reason behind DK’s decision to withdraw the proposal remains a mystery, with attempts to reach them for comments proving fruitless as of now.

Legal Issues Facing Tornado Cash Developers

Tornado Cash and its founders are currently facing severe allegations, being accused of laundering more than $1 billion of illicit funds. The traced funds include those linked to the Lazarus Group, a notorious hacking entity. The developers are being charged with money laundering, sanctions violations, and operating without a proper money transfer license.

As the legal issues for Tornado Cash’s creators unfold, their financial woes are further compounded by a failed funding attempt. A GoFundMe campaign aimed at gathering legal funds for Storm and Pertsev was shut down on February 16, with the platform citing potential risks to its operations, employees, and users due to a violation of service terms.

This ongoing saga poses a significant threat not only to Tornado Cash’s developers but also to other privacy-focused application creators. Some supporters argue that the platform simply provides software for decentralized money transfer and does not actively participate in the transfer process itself.

The Evolving Threat of Cybercrime and Cryptocurrency

Cybercrime, with a growing focus on crypto ransomware, has emerged as a major threat to crypto security. The staggering amount of $1 billion in ransomware payments underscores the increasing frequency of cyberattacks. This surge highlights the adaptive tactics of cybercriminals, who continually evolve to circumvent regulatory measures.

Despite the heavy sanctions imposed on Tornado Cash, it has seen a resurgence in usage. This unexpected comeback challenges regulatory bodies and showcases the nimble tactics of cybercriminals in navigating sanctions.

“I am astonished by Tornado Cash’s comeback, as it represents a significant challenge to regulatory bodies and underscores the evolving tactics of cybercriminals,” remarked Eric Jardine from Chainalysis.

Moreover, the creation of 583 new ransomware variants within a year points to an escalating threat looming over cyber and cryptocurrency security. Kim Grauer from Chainalysis commented on this significant escalation, noting the unprecedented level of ransomware activity observed.


The Arbitrum DAO’s decision to withdraw the proposed funding for Tornado Cash developers marks a significant moment in the ongoing saga of these allegations. The legal quandaries for Tornado Cash’s creators extend beyond this failed funding attempt, with both Storm and Pertsev facing arrests in different countries. The resilience of Tornado Cash in the face of heavy sanctions underscores the adaptive nature of cybercriminals and their relentless pursuit to circumvent regulatory measures.

As the crypto landscape continues to evolve, it is crucial for regulatory bodies and developers to adapt and navigate the complex legal waters surrounding privacy-focused technologies.

“The crypto landscape is constantly evolving, and it’s essential for regulatory bodies and developers to adapt and navigate the complex legal waters surrounding privacy-focused technologies,” concluded Eric Jardine from Chainalysis.

The future of Tornado Cash, its developers, and the broader crypto community remains uncertain. However, one thing is clear: cybercriminals continue to innovate, challenging both regulatory measures and the security of decentralized systems.