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Vitalik Buterin has donated 30 ETH to support the legal defense of Tornado Cash developers Alexey Pertsev and Roman Storm. The fund has already raised about 593 ETH to help the developers with their legal battles. Pertsev was recently found guilty of money laundering by a Dutch court and sentenced to over five years in prison. Buterin also recently shared his thoughts about the cultural diversity that has been created by Ethereum layer-2 solutions. Meanwhile, several analysts believe it is very possible for spot ETH ETFs to launch by the end of next month.
Buterin Donates to Support Tornado Cash Legal Fight
A wallet associated with Vitalik Buterin transferred 30 ETH, valued at around $113,000, to Juicebox, which is an open-source crypto crowdfunding platform. The funds were allocated for legal assistance to support Tornado Cash developers Alexey Pertsev and Roman Storm.
The fund has already raised about 593 Ether to support the legal defense of Tornado Cash developers in their court battle to prove their innocence.
Alexey Pertsev and Roman Storm legal defense fund (Source: Juicebox)
Law enforcement has been cracking down on privacy tools and it has hit the crypto community deeply. Crypto veterans, including Buterin, have been actively advocating for privacy and tools that help users manage their assets privately. Buterin himself has published a few papers and suggestions on how to improve privacy on Ethereum, making his support for Tornado Cash and crypto privacy in general unsurprising.
The crackdown by law enforcement has also affected privacy-focused coins like Monero, which has been delisted from major exchanges worldwide. Although privacy tools have faced a lot of criticism from regulators, the crypto community argues that arresting software developers for writing code and treating them as equivalent to terrorists is unjustified.
The Tornado Cash case is not the first time the crypto community has shown support for crypto privacy and human rights. In fact, crypto fans have been demanding the release of Ross Ulbricht, the creator behind the infamous Silk Road marketplace. Ulbricht is currently serving two consecutive life sentences without parole for non-violent crimes.
The community's advocacy has even caught the attention of former President Donald Trump, who promised to pardon Ulbricht if he gets elected as president.
Tornado Cash Dev Found Guilty
Earlier this month, a panel of judges in the Netherlands found Alexey Pertsev, a developer behind Tornado Cash, guilty of money laundering. Pertsev is a Russian national, and was tried in March for allegations that his tool allowed criminals, including North Korean hackers, to launder $1.2 billion in stolen cryptocurrency. Prosecutors argued that Tornado Cash welcomed criminals, and the court sentenced Pertsev to five years and four months in prison.
The court stated that Pertsev created a shortcut for financing crimes and terrorism and also chose to ignore the abuse of his tool. In August of 2022, Tornado Cash was sanctioned in the United States, making it illegal for US citizens to use the service.
Pertsev was arrested two days later in the Netherlands. Dutch prosecutors claimed that more than 30 percent of funds passing through Tornado Cash from 2019 to 2022 were laundered money, and Pertsev did nothing to prevent this criminal activity.
Pertsev argued that Tornado Cash operates on the Ethereum blockchain and is under nobody’s control. However, prosecutors contended that he and other developers controlled the web interface through which most transactions look place. Despite adding functionality to separate legitimate funds from criminal ones, prosecutors did not consider these efforts sufficient at all.
Pertsev's arrest made many crypto fans angry who argue that it is not fair to hold a developer responsible for users' behavior. Dutch prosecutors, on the other hand, held firm that the case was about Pertsev's choices, not privacy rights or open source liability. They believe Pertsev knowingly allowed criminal money into the system, making choices that facilitated money laundering.
Roman Storm, another developer of Tornado Cash, is set to face trial in the US on similar charges.
What is Tornado Cash?
Tornado Cash is a tool that allows users to anonymize their Ethereum transactions by using a system of "pools." These pools are Ethereum accounts managed by smart contracts, which function similarly to a bank without individual accounts. Users deposit their tokens into these pools. Each pool accepts specific tokens in set amounts, like a pool for 1 ETH deposits and another for 100 ETH deposits. This pooling mechanism makes it extremely hard to trace the origin of withdrawals.
The platform supports many cryptocurrencies and operates across multiple networks, though most transactions happen in ETH on the Ethereum blockchain. Tornado Cash's underlying system relies on immutable smart contracts, meaning the code governing the pools cannot be altered or controlled by anyone, including the original developers. However, certain functions of the platform can be adjusted through a governance process.
Vitalik Buterin on Ethereum Layer-2 Subcultures
Buterin recently shared his thoughts about Ethereum layer-2 solutions. According to the Ethereum co-founder, Ethereum layer-2 solutions are not only about scaling but also fostering diverse subcultures that expand the Ethereum ecosystem beyond what a single chain could achieve.
In a May 29 blog post, Buterin discussed the benefits of layer-2 blockchains beyond technical innovation, and shared his thoughts about how they serve as a hub for various crypto subcultures.
These subcultures include "cypherpunks" who build infrastructure and tools but remain hands-off about their use, "regens" who are focused on providing public goods, and "degens" who speculate on meme coins and non fungible tokens. Ethereum researcher Prof. Paul Dylan-Ennis first identified these groups, and according to him, they have influenced different approaches to scaling, virtual machine design, and application choices, turning layer-2s into a dynamic playing field.
Buterin noted that blockchain developers must be aware that their design choices to attract certain audiences might exclude others. For instance, a blockchain perceived as a "casino chain" may struggle to attract non-casino applications and core developers.
However, Buterin shared that he is very optimistic about "cultural pluralism," where different subcultures can coexist and contribute uniquely to the Ethereum ecosystem. He specifically mentioned examples like women taking leadership roles at Optimism and ZKSync’s commitment to being both cypherpunk and user-friendly.
While he acknowledges that there might be some misalignments between these subcultures, Buterin is confident that they can be resolved.
Spot Ether ETFs Could Launch by Late June
In other Ethereum news, United States spot Ether exchange-traded funds (ETFs) may launch by late June, according to analysts. On May 29, BlackRock updated its Form S-1 for its iShares Ethereum Trust (ETHA) with the Securities and Exchange Commission (SEC) after the regulator approved its 19b-4 filing.
Both approvals are required for the ETF to actually begin trading. Bloomberg ETF analyst Eric Balchunas sees this as a very good sign, and suggested that spot ETH ETFs could launch by the end of June, although he expected them more around July 4.
Bloomberg ETF analyst James Seyffart viewed BlackRock’s updated S-1 as a strong indicator that ETF issuers and the SEC are actively working together towards launching spot Ethereum ETFs.
BlackRock’s amended S-1 included details about its seed capital investor, which is an entity that allocates money to the fund so it can start trading. A BlackRock affiliate firm agreed to purchase $10 million in shares to enable trading. The ETF will trade under the ticker "ETHA."
On the same day, Hashdex withdrew its bid for a spot Ether ETF, despite SEC approval alongside BlackRock and seven other issuers.
