- Vitalik used Tornado Cash to send funds to Ukraine.
- On Thursday, he donated 30 Ether to its legal defence.
- New protocol marries compliance with privacy.
Vitalik Buterin, the co-founder and primary architect of Ethereum, donated 30 Ether, or more than $112,000, on Thursday to support the legal defence for Alexey Pertsev and Roman Storm, the developers behind the crypto mixer Tornado Cash.
At the same time, Buterin is helping develop a new crypto mixer that will provide users with an anonymising tool for crypto transactions.
But the new Ethereum-based platform will differ from Tornado Cash in one major way — it is being designed to be compliant with anti-money laundering laws.
Volatile period
Buterin’s twin moves mark a volatile period for crypto privacy. In May, Pertsev was sentenced to more than five years in prison after being convicted by a Dutch court in a $2.2 billion money laundering case.
In September, Roman Storm, another Tornado Cash dev, will be tried on similar charges in US court. Privacy advocates have rallied to Storm’s defence. In the meantime, Pertsev has filed an appeal to the judges’ verdict.
What’s next for Tornado Cash devs?
Their cases have transfixed the blockchain and open-source communities, which fear that developers will be held liable if their code is misused by third parties.
The Pertsev conviction also threw the future of smart contracts used in anonymising platforms into jeopardy.
The Dutch court ruled that Pertsev was responsible for the parties using Tornado Cash’s technology even though smart contracts are designed to run autonomously.
Coinbase, the Blockchain Association, and additional trade associations have submitted so-called “friend-of-the-court” briefs supporting Storm.
Matter Labs, the developer group behind layer 2 network ZKSync, donated $100,000 to the developers’ legal defence. The Uniswap DAO is currently mulling giving as much as $1.5 million in UNI tokens.
According to the decentralised funding platform Juicebox, the onchain legal defence fund has already attracted $2.2 million in donations.
Privacy and Blackrock
For his part, Buterin and other researchers, including Ameen Soleimani, outlined a unique mechanism for users to maintain their privacy without offering criminals squeaky-clean crypto, according to a 2023 paper.
The technology is called Privacy Pools and lets users opt out of mixing funds with potentially ill-gotten funds.
Soleimani is already implementing the idea in his project 0xbow.
It is designed to show that DeFi’s cypherpunk ethos is alive and well even as the sector attracts mounting interest from Wall Street powerhouses such as BlackRock and Fidelity.
Inbar Preiss and Liam Kelly are Europe-based correspondents for DL News. Got a tip? Email them at inbar@dlnews.com and liam@dlnews.com.