In a fireside chat with the cofounder of Ethereum, Vitalik Buterin, ignored the hype on the approval of Ether exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). Buterin avoided commenting on the long-awaited approval of the ETH ETFs.
However, Buterin expressed concerns about the court ruling concerning the developer of Tornado Cash. Earlier this week, the Dutch court ordered Tornado Cash developer Alexey Pertsev to face a five-year and four-month imprisonment.
Vitalik Buterin Reacts to Sentencing of Tornado Cash Developer
The bench of judges argued that Pertsev’s contribution to building the coin mixer allowed criminals to launder multi-million dollars through Tornado cash. Buterin described the court verdict on Tornado Cash developers as “really unfortunate.”
The crypto investor encouraged developers building on blockchain to develop privacy tools that offer next-gen solutions. At the DappCon event in Berlin, Buterin regretted that most developers were building their software based on assumptions.
He noted that the software developers failed to consider user privacy when developing their software. From the Tornado Cash developer’s case, Buterin noted that fighting for software’s privacy was legal and legitimate.
He noted that the assumptions made while developing the Tornado Cash should have been considered at the court. However, guided by the existing rule, the court found Pertsev guilty of money laundering.
The judges argued that criminals used Pertsev software to launder illicit funds. Buterin lamented that Pertsev’s sentencing would affect other Tornado Cash developers awaiting trials.
Buterin argued that ither Tornado Cash developer such as Roman Storm might receive a similar judgment since his facing money laundering charges. Unlike the crypto exchange, the coin mixer was created to obscure the source and destination of the money.
Ethereum Cofounder Advises Developers to Strengthen Software Privacy Tools
Despite prioritizing the privacy of individuals, the coin mixer has become a powerful tool for laundering illicit funds. The court noted that the North Korean hacker, the Lazarus Group, used the coin mixer to transfer large amounts of dirty money.
Following the growing adoption of Tornado Cash among criminals, the Office of Foreign Assets Control (OFAC) imposed restrictions on using coin mixers in the US. The OFAC noted that Tornado Cash supported the laundering of $7 billion.
The ban on Tornado Cash operation forced the OFAC to file charges against the Tornado Cash developers and founders for their contribution to money laundering. Citing the court ruling of Tornado Cash developer Buterin anticipates the court to show leniency on Roman trial.
He expressed concerns about Pertsev’s sentencing which was “really sad” situation. The Ethereum cofounder advised the developers to consider privacy standards when developing their software.
Significance of Balancing Software Privacy with Regulatory Compliance
Buterin restated that it is important to consider the privacy of the user. He anticipates that the Railgun and oxbow will become the next-gen solutions to provide necessary privacy.
Earlier, Buterin teamed up with Tornado Cash executive Ameen Soleimani, a security expert from Chainalysis Jacob Illum, and a scholar at the University of Basel to introduce privacy tools into blockchain transactions.
Buterin and his team formulated a synthesized research paper on importance of building privacy blockchain protocols that support user anonymity and compliance. The team intends to build the privacy blockchain protocol on Tornado Cash’s privacy pool created by Soleimani in March 2023 to uphold compliance with the regulations.
Buterin stated that the research will focus on balancing privacy pool protocols and compliance with the existing regulations.
