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Ethereum Faces Privacy Battle: Developers Under Fire, Foundation Steps In
Ethereum just dropped 15%+ this week, and the reason? A massive legal showdown over code, privacy, and who gets to decide what developers can build.
Here’s the drama: The Ethereum Foundation and Keyring Network just announced they’re bankrolling the legal defense for Tornado Cash developers Roman Storm and Alexey Pertsev. Both are facing serious charges—Storm got convicted of one count in August 2025, while Pertsev is still battling it out in Dutch courts after two years.
The real question? Should open-source developers get prosecuted for writing code that enables privacy?
Storm allegedly processed over $1 billion through Tornado Cash, including hundreds of millions linked to North Korea’s Lazarus Group. The feds say he knowingly facilitated money laundering. His defense? “I just built the protocol. What users do with it isn’t my problem.”
Keyring Network CEO Alex McFarlane framed it differently: “Privacy is a fundamental right. Developers shouldn’t face criminal charges for writing software that protects freedom.” They’re literally using protocol revenue from their zkVerified vaults to fund the legal battle.
Why this matters:
If Storm and Pertsev lose, every dev who writes privacy-focused code could theoretically face prosecution. That’s a nuclear option for DeFi innovation. Banks operate under strict compliance frameworks—but blockchains? They run on open-source principles and transparency through code.
The community sees this as an existential fight. Pertsev posted on X: “I’m beyond grateful. This gives me strength to keep fighting (#CodeWithoutFear).”
Analysts say the Ethereum community’s backing isn’t just symbolic—it’s a direct message to regulators: We’re willing to fight for developer freedom.
The broader stakes: If governments win here, expect stricter smart contract regulations worldwide. If developers win? Privacy tools could flourish again.
This isn’t just about Tornado Cash anymore. It’s about whether blockchain stays decentralized and permissionless—or gets clamped down by compliance frameworks designed for traditional finance.
Court’s next move will define the next decade of DeFi.