Arbitrum DAO to refine legal aid proposal for Tornado Cash amid industry debate

Arbitrum’s decentralized autonomous organization (DAO) has withdrawn a proposal aimed at funding the legal defense expenses of Tornado Cash’s developers.

In a Mar. 9 post on social media platform X (formerly Twitter), Joseph Axisa, the Arbitrum DAO contributor who wrote the proposal, explained that it was removed for further refinements.

Axisa said:

“[The] proposal was removed to have further discussions with delegates and Alexey and Roman’s lawyers personally [about] proper method of contribution.”

Initially, a Mar. 7 proposal suggested that the Arbitrum community donate around 600,000 ARB tokens, valued at approximately $1.3 million, for the legal defense of Roman Storm and Alexey Pertsev, the creators of Tornado Cash.

Additionally, the proposal outlined intentions to allocate funds towards public relations and advocacy initiatives to raise awareness about privacy-focused technologies and the legal challenges faced by the developers.

However, the proposal was unexpectedly retracted without clarification, triggering discontent within the crypto community. An Ethereum Foundation fellow, Devansh Mehta, criticized the removal, emphasizing the right to legal representation for individuals facing accusations.

Mehta said:

“The entire forum thread was deleted along with the snapshot without any discussion or record of it, supposedly on overblown fears of legal risk. There is absolutely nothing wrong with paying for the legal defense of someone accused, it’s a US right that everyone deserves a lawyer.”

In response, Axisa disclosed plans to revise the proposal to address legal concerns and protect privacy-focused tools.

“The proposal we drafted did not address legal concerns that were posed following it’s submission. To put everyone’s mind at ease, the renewed proposal (with a larger impact); will address these concerns so that participants have peace of mind,” Axisa explained.

Meanwhile, the legal challenges facing the developers of Tornado Cash stem from allegations of aiding North Korea’s Lazarus Group money laundering activities.

The Department of Justice (DOJ) claims that Tornado Cash facilitated approximately $1 billion in illicit proceeds. The case originated with Tornado Cash’s inclusion on the Office of Foreign Asset Control (OFAC) Specially Designated Nationals list and has since extended to involve its founders and developers.

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