US Court Slashes Tornado Cash Sanctions—Privacy Wins, Regulators Groan

In a landmark ruling that’s got crypto libertarians popping champagne and compliance officers reaching for aspirin, a federal court just axed sanctions against privacy tool Tornado Cash.

The legal showdown—which pitted blockchain anonymity against government oversight—ends a two-year battle that became a referendum on financial privacy. Critics argue the mixer enables money laundering; devs counter that code is speech. Guess which side just scored a W?

Meanwhile, Wall Street banks—still charging $35 overdraft fees—somehow remain above reproach. Funny how that works.

Tornado (TORN) Decision

The district court ruled that OFAC’s imposed sanction was unlawful. Judge Robert Pitman from the US Western District of Texas asserted that OFAC’s sanction on Tornado Cash was invalid. This decision included preventive measures against the possible reapplication of the same regulation by OFAC in the future.

In the case, six users of Tornado Cash filed a lawsuit seeking to annul the sanctions. The plaintiffs pointed out the uncertainties in the delisting process despite the appeals court ruling. Accordingly, the plaintiffs’ lawyers demanded the regulation be annulled before the judiciary.

Plaintiffs’ Lawyers: “Enough is enough. The court needs to apply the directive decided months ago by the appeals court. The defendants’ determination should be deemed unlawful and revoked.”

Officials’ Statements

The court ruling revealed the lack of legal grounds for OFAC’s decision. Judge Pitman stated that OFAC carried out the delisting based on general principles and legal assessments. Meanwhile, the US Department of Justice continues its investigation into the charges against Tornado Cash developers Roman Storm and Roman Semenov. Roman Semenov remains listed under sanctions.

US Deputy Attorney General Todd Blanche announced a new memo narrowing the enforcement priorities related to crypto assets. The memo instructed the suspension of investigations and reevaluation of ongoing cases concerning end-user violations arising from decentralized services or offline wallet transactions according to updated standards.

These developments have affected various legal proceedings in the crypto sector. For instance, in the investigation against Samourai Wallet founders, prosecutors requested an extension for dropping charges under new priorities. Notable figures in the crypto sector have appealed to White House officials through the DeFi Education Fund, calling for changes in regulatory legislation.

Judge Robert Pitman’s ruling highlighted that the current legal process supports the claim of OFAC’s overreach. This decision points to uncertainties in enforcement and potential similar legal disputes in the future.

These legal proceedings provide critical insights into regulatory approaches while serving as a guide in resolving disputes among the involved parties. The court’s decision can be considered an essential reference in the ongoing process of judicial balance and impartial assessment.