Arbitrum DAO Withdraws $1.2 Million Support for Tornado Cash, Citing Legal Issues

The individual behind an Arbitrum DAO proposal, which sought to donate up to $1.28 million in cryptocurrency to aid Tornado Cash developers Roman Storm and Alexey Pertsev in their legal defense against criminal charges, has withdrawn the proposal. Recent updates reveal that concerns raised by token holders regarding potential legal liabilities linked to the donation prompted the removal of the proposal.

Arbitrum Proposal to Support Tornado Cash Removed

Arbitrum contributor Joseph Axisa had put forward a proposal aimed at allocating funds to a legal defense fund for individuals facing criminal charges. However, the author has removed the proposal from the Arbitrum discourse forum, according to reports.

The proposal, disclosed on Wednesday, outlined plans to pledge between 200,000 and 600,000 ARB tokens (equivalent to approximately $400,000-$1.2 million) to support the legal defense of individuals known as Storm and Pertsev. They face charges related to their involvement in developing Tornado Cash, a smart contract protocol designed to enhance the privacy of Ethereum transactions.

Unchained reported on Friday that the proposal sought to assist Storm and Pertsev in covering their legal expenses. A third cofounder, Roman Semenov, who was also charged, remains at large.

However, by the evening of March 8, the proposal post was no longer visible on Arbitrum’s discourse forum. The exact reason for its removal and the timeline of events surrounding it remain unclear.

An Arbitrum representative also confirmed to The Block the removal of the proposal at the author’s request. Under the deleted proposal, the pledged funds totaling around $10,000 per month were suppose to go to the crowd-funding campaign of WeWantJusticeDAO, which aims to cover the substantial legal costs incurred by Storm and Pertsev. The proposed tokens were slated to be held on Juicebox, a crypto-focused fundraising platform, as outlined in the proposal documentation.

Arbitrum Community Explores Alternative Funding

Despite the removal of the initial proposal, members of ArbitrumDAO are actively considering alternative avenues to finance the legal defense of developers involved in the Tornado Cash project, a source familiar with the situation revealed.

According to the source, one potential option under discussion is directing funds to Coin Center, a prominent non-profit organization dedicated to cryptocurrency policy advocacy. Additionally, a revised version of the proposal will surface on ArbitrumDAO’s forum in the coming week, as disclosed by another source to The Block.

Since the developers’ arrests, they have garnered significant support from within the decentralized finance (DeFi) community. DeFi represents a broad segment of the cryptocurrency industry, characterized by its commitment to principles of financial autonomy and innovation, which align closely with the ethos associated with Tornado Cash and its creators.