Tornado Cash Wins Legal Reprieve: Court Overturns Sanctions in Landmark Ruling
Privacy protocol Tornado Cash scores a critical victory as judges rule sanctions were ’arbitrary and capricious.’ The decision sends shockwaves through crypto compliance circles—just as banks start charging ’blockchain surveillance fees.’
Key implications:
- Sets precedent for distinguishing between tools and criminal misuse
- Treasury Dept must now provide clearer guidance on sanctions criteria
While the ruling doesn’t erase Tornado’s association with North Korean hackers, it forces regulators to actually articulate their rules before swinging the banhammer. Cue the compliance industry’s pivot to ’sanctions risk scoring as a service.’
What Does the Court Decision Mean?
The court found that OFAC did not fully follow the necessary legal protocols when adding Tornado Cash to the sanctions list. Consequently, reinstating these sanctions in their current form is deemed impossible. However, this does not preclude the possibility of new proceedings in the future.
Another notable aspect of the ruling is that the defendants, namely government officials, did not commit to refraining from imposing similar sanctions in the future. This indicates the meticulousness required in following procedures in similar cases.
Among the court’s statements, it was noted that “OFAC cannot legally reinstate the same sanctions at this time.” This remark underscores the importance of adhering to administrative procedures in cryptocurrency regulations.
Coinbase Voices Support for the Court’s Decision
Coinbase‘s Chief Legal Officer, Paul Grewal, publicly expressed support for the court’s decision after the ruling. Grewal criticized the methods employed by the U.S. Treasury during the delisting process, asserting that relevant authorities must act in compliance with the law.
In his statement, Grewal remarked, “OFAC can no longer legally reinstate the original sanctions. I commend the brave plaintiffs who stood up against their government.” This highlights a growing trend of industry players engaging in legal battles.
The open support from significant platforms like Coinbase reveals that the Tornado Cash case has evolved into not only a technical but also a political and ethical issue. The mounting regulatory pressure in the cryptocurrency world is accompanied by a robust legal resistance.
Following the court’s decision, Tornado Cash’s market value saw a swift increase, reflecting a positive response from market participants with an approximate 8% rise on a daily basis.
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