Ethereum Foundation Supports Legal Defense of Tornado Cash Developer

Significant Contribution from Ethereum Foundation

The Ethereum Foundation has made a substantial donation exceeding one million dollars to aid Alexey Pertsev, a developer associated with Tornado Cash, in his legal battle. This financial support comes in the wake of Pertsev’s conditional release, which allows him to focus on appealing his conviction for money laundering charges in the Netherlands.

Details of the Donation

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On a recent Wednesday, the Ethereum Foundation revealed a contribution of $1.25 million towards Pertsev’s legal expenses. This announcement was made through a social media post, where the Foundation emphasized its stance that “privacy is normal, and writing code is not a crime.”

Background on Tornado Cash Sanctions

In August 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash, a crypto mixing service built on the Ethereum blockchain. These sanctions were due to the protocol’s alleged failure to implement adequate controls, which reportedly allowed malicious actors to launder funds. The US Treasury claimed that the service had facilitated laundering of over $7 billion since 2019, including $455 million tied to the North Korean hacker group, Lazarus Group.

Legal Challenges Faced by Pertsev

Following these sanctions, Alexey Pertsev was arrested in the Netherlands and faced charges of money laundering. According to accusations, Pertsev was involved in enabling the laundering of $1.2 billion through Tornado Cash from its inception in December 2019 until August 2022. In May 2024, he was found guilty by the s-Hertogenbosch Court of Appeal and was sentenced to five years in prison. However, he has since been granted a supervised release to prepare an appeal against his conviction.

Efforts Toward Legal Appeal

Reports indicate that Pertsev’s legal team has filed an appeal against the court’s ruling, resulting in his conditional release from prison. In a recent social media update, Pertsev shared details of his release on February 7, highlighting that his freedom is subject to electronic monitoring, which he acknowledges is an improvement over incarceration.

Continued Advocacy for Privacy Tools

Pertsev expressed his gratitude towards the Ethereum Foundation for its financial support, which now allows him to focus entirely on his appeal. Ethereum’s creator, Vitalik Buterin, also echoed the Foundation’s sentiments, reiterating that “privacy is normal, and writing code is not a crime.” Buterin has been a vocal advocate for privacy, often utilizing privacy-centric protocols such as Railgun.

Calls for Fair Treatment

Recently, Buterin called for the release of Roman Storm, a co-founder of Tornado Cash, who was also detained in 2022 and is awaiting his trial. He emphasized that no developer should be left behind, particularly after the pardon of Silk Road founder Ross Ulbricht by former US President Donald Trump.

Related Developments in the Crypto Space

The Ethereum Foundation’s donation follows a similar contribution by crypto firm Paradigm, which donated $1.25 million towards Roman Storm’s legal defense. Paradigm argued that prosecuting developers for the actions of third parties poses a threat to innovation in the crypto sector and beyond.

Recent Legal Wins for Crypto Privacy

In a recent win for crypto privacy advocates, the US District Court for the Western District of Texas overturned OFAC’s sanctions on Tornado Cash. The Fifth Circuit Court of Appeals declared that OFAC had exceeded its authority, noting that Tornado Cash’s immutable smart contracts do not qualify as “property” under federal law, thus exempting them from the International Emergency Economic Powers Act (IEEPA).