Ethereum Foundation Partners With Keyring to Fund Privacy Developer Legal Defense
The Ethereum Foundation launched a funding program for privacy-focused developers through a partnership with Keyring. According to ZyCrypto, the initiative uses zkVerified vaults on Ethereum mainnet. Protocol fees will support legal defenses for Tornado Cash developers Roman Storm and Alexey Pertsev.
The joint initiative directs 100% of protocol fees to legal defense funds during the first two months. ZyCrypto reports that MolochDAO handles proceeds with a 50/50 split between donation addresses. Users supply USDC to zkVerified vaults and earn daily APY rewards. The project raised $22,109 in fees as of October 2025.
Ethereum developer Vinay Vasanji explained the model preserves economic efficiency without changing participation incentives. He said early vault users directly support legal protection for privacy-focused developers. The solution links growth of financial tools with protection of their builders.
Legal Defense Becomes Critical for Open Source Developers
The funding mechanism addresses mounting legal pressure on privacy tool creators. Roman Storm faced trial in August 2025 and received a split verdict. CryptoImpactHub reports he was found guilty of operating an unlicensed money-transmitting business. He avoided conviction on money laundering and sanctions violations charges.
Alexey Pertsev received a 64-month prison sentence in the Netherlands in May 2024. CoinDesk reports he was released in February 2025 for house arrest. He now prepares an appeal against the conviction. His case raised questions about developer liability for third-party misuse of code.
The legal battles cost millions in defense fees and create uncertainty for developers. Many in the crypto community view these prosecutions as threats to open-source innovation. The Ethereum Foundation pledged $1 million for Storm's legal defense according to reports. Vitalik Buterin publicly supported the defense efforts.
Privacy Coins Experience Unexpected Market Growth
Privacy-focused cryptocurrencies outperformed major tokens in 2025 despite minimal media attention. Yahoo Finance reports the privacy coin sector rose 71.6% in 2025. This exceeds Bitcoin's 27.1% gain and Ethereum's 33.4% increase during the same period.
Zcash surged over 150% in a single week in October 2025. The rally followed Grayscale's launch of a Zcash Trust for accredited investors. Monero gained nearly 14% over one week with a market cap of approximately $6.1 billion. Privacy token momentum intensified recently after months of flat public interest.
The sector benefits from capital rotation and renewed focus on privacy features. More than 700 privacy-focused projects exist across the crypto ecosystem. Regulatory pressure continues as authorities target mixing services and shielded transactions. The Ethereum Foundation's privacy cluster coordinates 47 researchers and engineers developing protocol-level privacy features.
Traditional finance institutions watch privacy developments closely as compliance requirements evolve. The balance between privacy rights and regulatory oversight remains contentious. Some analysts believe privacy tools will become more relevant as surveillance increases. Others worry excessive restrictions could stifle legitimate privacy innovation.
Further Reading
For those interested in decentralized governance tools and community coordination mechanisms, our comprehensive DAO tooling guide provides detailed analysis of over 100 platforms. The guide covers voting systems, treasury management, and governance frameworks used across the ecosystem.
