Arbitrum DAO proposal for million-dollar donation to Tornado Cash devs to be reworked over legal concerns

An ArbitrumDAO proposal to donate up to $1.28 million in crypto toward Tornado Cash developers Roman Storm and Alexey Pertsev's fight against criminal charges has been deleted by its author, as token holders voiced concerns over whether such a donation might pose legal risks, sources familiar with the matter told The Block. 

The proposal from Arbitrum contributor Joseph Axisa, which was published on Wednesday, set forth a plan to pledge between 200,000 and 600,000 ARB (about $400,000-$1.2 million) to a legal defense fund for Storm and Pertsev, who are facing criminal charges for writing software for Tornado Cash, a smart contract protocol that makes crypto transactions on Ethereum difficult to track, Unchained reported on Friday. A third cofounder, Roman Semenov, who was charged alongside Storm, remains at large. 

But by last Friday, the evening of Mar. 8, that post was no longer viewable on Arbitrum’s discourse forum. 

The exact timing of the post’s removal, which appeared to go largely unnoticed by Arbitrum’s community on X, remains unclear. An Arbitrum representative confirmed to The Block that the proposal was removed at the request of its author. 

Under the now-deleted proposal, the funds were to be sent to WeWantJusticeDAO’s crowd-funding campaign, which coordinates coverage of Storm and Pertsev’s roughly $100,000 per month legal expenses, according to the group’s fundraising webpage. The donated tokens were to be held on Juicebox, a crypto-focused fundraising platform, the proposal shows. 

An alternate approach?

Despite the proposal's deletion, ArbitrumDAO members are still considering alternative modes of financing the developers’ legal battles, including sending funds to Coin Center, a non-profit organization with a focus on crypto policy, a source familiar with the matter said. A new version of the proposal will likely appear on AribitrumDAO's forum this week, a source told The Block.

Since their arrests, the developers have received an outpouring of support from proponents of DeFi, a sprawling sector of the crypto industry built on radical ideas of financial freedom like those with which Tornado Cash supporters associate the software and its developers.

It is unclear whether Arbitrum’s community would face legal risks for making a hefty donation to Storm and Pertsev. Last month, GoFundMe  shut down a crowdfunding request for Storm’s legal aid, citing a clause in its terms of service enabling it to shut down petitions that  are "unacceptable or objectionable" or pose "harm or liability of any type," Ryan Sean Adams, a contributor to the campaign, said in an X post.

Update: The headline and quick takes have been amended for clarity.