Ethereum Foundation (EF) Throws Support Behind Convicted Tornado Cash Co-Founder

• The Ethereum network stands to lose more if Roman Storm loses in the trial and appeal processes.
• Ethereum Foundation has advocated for privacy and freedom to code but the U.S. government has argued that the Tornado Cash developers committed offenses via omission.
• Vitalik Buterin has since cautioned on the heavy leveraging of Ether treasury companies.

The Ethereum Foundation (EF) has offered to match up $500k in donations from the public in a bid to further support Roman Storm, a convicted co-founder of Tornado Cash. The EF has urged the members of the public to donate towards the legal aid of Storm to fight for privacy and Web3 coding.

Why Is the EF Getting Involved?

In its announcement, the EF framed this as a critical fight for the future of privacy and the right to write open-source code in Web3. The foundation believes the outcome of Storm’s trial and subsequent appeals will set a major precedent for developers around the world and is urging the public to donate to his legal aid fund.

What Are the Charges that the Ethereum Foundation is Fighting for Roman Storm?

Notably, Roman was convicted earlier this week for knowingly operating a money transmitting business that facilitated more than $1 billion in criminal proceeds. The United States government argued that Roman committed a crime for not incorporating key features of anti-money laundering (AML) in the Tornado Cash platform. 

Consequently, Roman is facing up to a 5-year prison sentence and more if the government opts to retry the other counts. The other charges for Roman were conspiracy to commit money laundering and violate the International Economic Emergency Powers Act (IEEPA)

What’s the Expected Impact on the Ether Ecosystem 

The Ethereum network is the top web3 ecosystem, with a total value locked of $87 billion and a stablecoins market cap of around $134 billion. The outcome of the Roman case will heavily influence the future development aspect of the Ethereum ecosystem, since more developers will be cautious about privacy-centric innovations if the government wins the case.

However, if Roman and the Tornado Cash legal team win in an appeal case,  the future development of web3 protocols will have a tailwind.

Broader Market Picture for Ethereum

The Ethereum network has attracted more institutional investors amid rising capital rotation from Bitcoin. According to market data from Santiment, the Ether whales purchased more than 1.8 million ETH coins during the past four weeks. 

The rising demand for Ether by corporate investors seeking to implement Ethereum treasuries has triggered bullish sentiment. According to the latest market data, Ether price gained 8% this week to hover above $3,909 on Friday during the early New York session.

However, Ethereum co-founder Vitalik Buterin has cautioned the ecosystem against rising leverage by corporate investors seeking to implement Ether treasuries. Buterin highlighted that overleveraging through the Ether treasury companies could trigger the next major bear market if a series of liquidations happened

“If you woke me up 3 years from now and told me that treasuries led to the downfall of ETH… my guess would be that they turned into an overleveraged game,” Buterin noted.