- The Ethereum Foundation pledged $1.25M to defend Tornado Cash developer Alexey Pertsev, sentenced to 64 months for alleged money laundering facilitation.
- Dutch prosecutors claim Pertsev ignored AML duties via privacy tools; U.S. charges developer Roman Storm for unlicensed money transmission.
The Ethereum Foundation has committed $1.25 million to support Alexey Pertsev, a developer of the privacy-centric protocol Tornado Cash, as he appeals a 64-month prison sentence imposed by Dutch authorities in 2024.
Pertsev, released under house arrest to prepare his defense, faces charges tied to alleged facilitation of illicit finance via the non-custodial infrastructure. The foundation framed its funding as a defense of “financial sovereignty” and the principle that protocol architects cannot be held liable for automated code execution.
The EF is donating $1.25M to the legal defense of Alexey Pertsev.
Privacy is normal, and writing code is not a crime.
You can contribute to @alex_pertsev's defense here: https://t.co/shWFNoDJ9g https://t.co/ITvEiRkAGt
— Ethereum Foundation (@ethereumfndn) February 26, 2025
Dutch prosecutors argued Pertsev neglected anti-money laundering (AML) obligations by deploying immutable smart contracts that obfuscate transaction trails—a stance critics label regulatory overreach. Ethereum co-founder Vitalik Buterin previously contributed 50 ETH (~$170,000) to Pertsev and Roman Storm, a second Tornado Cash developer indicted in the U.S. for operating an unlicensed money transmitter.
Storm’s case, now advancing through U.S. courts, has spurred a coalition-led lawsuit against the Department of Justice (DOJ), alleging vague compliance frameworks deter open-source development.
Investment firm Paradigm matched the Ethereum Foundation’s $1.25 million pledge to Storm’s defense, signaling institutional pushback against expanding code liability. Legal analysts note the cases could redefine boundaries between protocol neutrality and jurisdictional mandates, particularly after a November 2024 U.S. court ruling invalidated Treasury sanctions against Tornado Cash.
The EF is donating $1.25M to the legal defense of Alexey Pertsev.
Privacy is normal, and writing code is not a crime.
You can contribute to @alex_pertsev's defense here: https://t.co/shWFNoDJ9g https://t.co/ITvEiRkAGt
— Ethereum Foundation (@ethereumfndn) February 26, 2025
Judges determined its self-executing smart contracts lack “property” status under federal law, rendering sanctions unenforceable against decentralized systems without controllable operators.
The rulings underscore friction between regulators targeting privacy-preserving protocols and advocates defending blockchain’s permissionless ethos. While authorities emphasize crime mitigation, developers warn conflating tool creation with third-party misuse sets a hazardous precedent.
Less than 1% of global enterprises currently hold crypto assets, per industry data, amplifying scrutiny on how legal outcomes might shape institutional adoption of privacy tech.
For now, Tornado Cash’s code remains active on-chain—a testament to blockchain’s censorship resistance, even as its creators battle off-chain consequences.
