According to CipherShed's forum the main thing they have to do is remove all references to TrueCrypt from the code: https://forum.ciphershed.org/viewtopic.php?f=12&t=48
I'm not sure if anyone on this site is actually a TrueCrypt developer but there is a new forum: https://forum.truecrypt.ch/
They have some discussion about CipherShed and some other TrueCrypt forks: https://forum.truecrypt.ch/t/working-with-ciphershed/22
> On 16 June 2014, the only alleged TrueCrypt developer still answering emails, replied to an email by Matthew Green about the licensing situation. He is not willing to change the license to an open source one, believes that Truecrypt should not be forked, and that if someone wants to create a new version they should start from scratch.[1]
(Copy of the email on pastebin[2])
[1]: http://en.wikipedia.org/wiki/TrueCrypt#End_of_life_and_licen... [2]: http://pastebin.com/RS0f8gwn
"I don't feel that forking truecrypt would be a good idea..."
This is a straight-up abuse of copyright law. Author has no intent of profiting from the project, no intent of continuing to work on the project, and still waves around the hammer of copyright as if it's a fundamental right absent any connection to the constitutional qualification of promoting progress in the sciences and useful arts.
To say there's a moral imperative against forking and relicensing in this scenario is stretching the rationale for the copyright monopoly quite far.
It's not at all shocking that the creator and maintainer of a free encrypted filesystem would eventually abandon the effort, given that comments like these are how the effort is ultimately repaid.
Is there a name for the hammer you swing, the hammer not of abusing copyright but instead of not writing simulated hardware disk encryption and donating it for free? It seems to me that's a far mightier hammer than the one you described.
The previous version of TrueCrypt (7.1a - the one you'd actually want to fork because it could still encrypt things), was still under a licence that'd allow you to fork it as long as you didn't call it TrueCrypt (or anything resembling it).
That was basically inherited from E4M. It's an ugly licence, however.
https://diskcryptor.net/ might be worth looking into (this is not a recommendation, I have not audited it). It's certainly cleaner - TC's kinda ugly inside, with a decade of maint cruft.