The crypto community has rallied behind the developers of Tornado Cash, a former crypto mixing service, as they face legal charges of money laundering, sanctions violations, and operating an unlicensed money-transmitting business. With one developer already convicted and sentenced to prison, the community argues that merely writing code shouldn't be a crime.

Following the arrests of Tornado Cash co-founder Roman Storm and developer Alexey Pertsev, the crypto community established JusticeDAO, an advocacy group dedicated to raising funds for their legal defense. The group has successfully raised over 654 Ether (ETH), equivalent to $2.3 million, through the “Free Alexey & Roman” fundraiser on the decentralized platform Juicebox. The fund has also accumulated 70 ETH via the JusticeDAO page.

Juicebox has made a publicly available spreadsheet to track the expenses of the Free Alexey & Roman fund. According to this data, $1.39 million has already been spent on legal fees between December 2023 and May 2024. The fund anticipates spending an additional $2.8 million over the next five months, plus $400,000 for expert research and additional legal fees, bringing the total projected legal costs for 2024 to nearly $3.35 million.

Ethereum co-founder Vitalik Buterin, known for his advocacy of privacy, is among the significant contributors to the fund. Advocates within the crypto community argue that developing tools to protect financial privacy, such as a crypto mixer, is not criminal activity, although regulators disagree.

In 2022, the U.S. Treasury Department accused Tornado Cash of facilitating the laundering of over $7 billion in crypto assets over nearly three years. In August 2023, co-founders Storm and Roman Semenov faced charges of money laundering and sanctions violations. Storm was arrested by the U.S. Federal Bureau of Investigation, and Semenov was placed on the Treasury’s Office of Foreign Assets Control sanction list.

Storm faces three charges: conspiracy to commit money laundering, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate the International Emergency Economic Powers Act. He has pleaded not guilty to all charges, and his legal counsel has appealed to dismiss the money laundering charges, arguing they are "fatally flawed" as Storm cannot control or prevent sanctioned entities from using the crypto mixer.

In May 2024, a Dutch court found Pertsev guilty of money laundering and sentenced him to five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets on the platform.

The Tornado Cash case raises significant questions about the legal responsibility of coders for the end-use of their creations. Josh Garcia, a partner at Ketsal, a law firm specializing in fintech and Web3, notes that developers cannot foresee all potential criminal uses of their software. He warns that the Dutch court's decision may force developers in the Netherlands to remain anonymous or pseudonymous to avoid criminal liability, and some may even abandon development out of fear that the U.S. will adopt a similar stance.

Rebecca Liao, co-founder and CEO of Web3 developer platform Saga and a Harvard Law School graduate, argues that the U.S. legal system requires more than just writing code to constitute a criminal offense—it necessitates demonstrating criminal intent. The prosecution aimed to prove that Tornado Cash developers knowingly facilitated illegal activities, and the court agreed. Liao suggests that developers must be vigilant about potential misuse of their creations and implement safeguards to prevent legal repercussions.

Storm’s upcoming trial will be a pivotal moment for the crypto industry, particularly for privacy-focused services. The Dutch court's prosecution of Pertsev has already had a chilling effect on the crypto developer community. Legal experts predict that this case will place unprecedented pressure on developers working on similar projects.

Jamie Wright, founder of the Wright Law Firm, indicates that cases involving technology and criminal intent often result in severe penalties due to the perceived threat these technologies pose to financial and regulatory systems. The future of Tornado Cash’s developers hinges on whether the courts view their actions as neutral technological advancements or as knowingly enabling illegal activities.