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Tornado Cash wins in court, and TORN flies!
By Davide Grammatica
A U.S. appeals court has overturned some sanctions against Tornado Cash: OFAC allegedly “exceeded its authority”
A (partial) victory for Tornado Cash
Many will remember Tornado Cash from his legal misadventures. The famous mixer had been targeted by U.S. authorities because of several illegal activities that took place through it, but theOffice of Foreign Assets Control (OFAC), which took over the matter, allegedly went too far.
This was stated by a U.S. court just in the last few hours, acknowledging errors in OFAC’s prosecution and nullifying some sanctions.
Specifically, it was recognized that Tornado Cash’s smart contracts were not “property” of the platform, and therefore the regulator could not sanction it lacking this prerequisite. It would also have been inconsistent to apply rules related to the International Emergency Economic Powers Act (IEEPA) or the North Korea Sanctions and Policy Enhancement Act.
“The smart contracts at issue in this appeal cannot be possessed, “ the ruling reads. “Accordingly, no one can be ‘prohibited’ from using the smart contracts in the Tornado Cash pool.”
BIG NEWS: Federal appeals court says Treasury overstepped its authority when sanctioning immutable smart contracts deployed by the @TornadoCash devs because they are NOT property of a foreign person or entity.
“The immutable smart contracts at issue in this appeal are not… pic.twitter.com/1tPhRPmgVE
— Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) November 26, 2024
Community reaction
The victory is mainly thanks to six U.S. Tornado Cash users, who first appealed, complaining that the sanctions violated the Administrative Procedure Act. Citizens will therefore once again be allowed to use this protocol.
Tornado Cash’s problems, however, are not over. OFAC still has a say in the protocol, which has been accused of conveying malfeasance such as money laundering even by foreign actors (such as North Korea), and the appeals court itself has suggested extending the issue to Congress.
In the meantime, the crypto community seems to have taken the news well, so much so that the TORN token has surged %400 in the last 24 hours.
