The Arbitrum DAO has withdrawn a proposal seeking to allocate nearly $1.3 million worth of its cryptocurrency (ARB tokens) to fund the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev.

The proposal, submitted earlier this month, sparked debate within the Arbitrum community. Supporters argued that funding the defense was necessary to protect the rights of developers and promote privacy-preserving technologies within the cryptocurrency space.

However, critics raised concerns about the potential legal and reputational risks associated with financially supporting individuals facing criminal charges. These charges included allegations that Tornado Cash, a cryptocurrency mixing service, facilitated money laundering for over $1 billion, including funds linked to North Korean hackers.

The exact reason behind the proposal’s removal remains unclear. An Arbitrum spokesperson confirmed it was withdrawn at the request of the author, a pseudonymous delegate known as DK. While the initial proposal garnered significant support from voters, it’s possible that the aforementioned concerns or unforeseen circumstances influenced the author’s decision.

This development highlights the ongoing debate surrounding the legal status of cryptocurrency mixers and the responsibilities of developers within the blockchain ecosystem. It also raises questions about the role of Decentralized Autonomous Organizations (DAOs) in navigating complex legal and ethical issues.

The future of financial support for the Tornado Cash developers remains uncertain. Discussions within the Arbitrum DAO regarding alternative funding methods, potentially involving non-profit organizations focused on crypto policy, are reportedly ongoing.