Tornado Cash Emerges Victorious as Feds Drop Appeal – Privacy Wins in Landmark Crypto Case

After years of legal wrangling, the feds just folded their hand against Tornado Cash. No appeals, no last-minute maneuvers—just a quiet surrender in the battle over financial privacy.

The backdoor closes

Regulators threw everything at the crypto mixer: sanctions, criminal charges, even the kitchen sink. Today’s withdrawal signals they finally ran out of ammo—or political will.

What this means for DeFi

Expect privacy protocols to breathe easier (while compliance officers hyperventilate). The precedent? Maybe chains can’t be liable for their users—or maybe the government just got tired of losing.

The cynical take

Wall Street still gets private Swiss accounts. Crypto gets a win—just as institutional money starts flowing. Coincidence? Please. The rules loosen when the big boys want in.

One thing’s clear: when the next bull run hits, Tornado’s anonymized ETH will be flowing faster than a hedge fund’s dark pool trades.

TLDR

• US Court of Appeals dismissed Coin Center’s appeal against Treasury Department over Tornado Cash sanctions after both parties agreed the case was moot
• Treasury Department (OFAC) had lifted sanctions on Tornado Cash in March 2025, making the legal challenge unnecessary
• TORN token price jumped over 3% and trading volume spiked 154% following the dismissal announcement
• Tornado Cash co-founder Roman Storm still faces federal criminal trial next week in New York with potential 45-year sentence
• The legal victory comes as regulatory landscape for crypto appears to be softening under the Trump administration

The US Court of Appeals for the Eleventh Circuit has dismissed a long-running legal challenge against Treasury Department sanctions on Tornado Cash. The crypto advocacy group Coin Center and the Treasury Department filed a joint motion to end the appeal process.

The dismissal came after both parties agreed the case had become moot. This decision followed the Treasury’s Office of Foreign Assets Control (OFAC) lifting sanctions on the Ethereum-based mixer in March 2025.

Peter Van Valkenburgh, executive director of Coin Center, confirmed the end of the legal battle on social media. He stated that the government chose not to defend its broad interpretation of sanctions laws in court.

This is the official end to our court battle over the statutory authority behind the TC sanctions. The government was not interested in moving forward and defending their dangerously overbroad interpretation of sanctions laws.

Thank you again to our co-plaintiffs:…

— Peter Van Valkenburgh (@valkenburgh) July 7, 2025

The original sanctions were imposed in August 2022 after OFAC alleged Tornado Cash was used by North Korean hackers. The Lazarus Group reportedly laundered billions in illegal payments through the service.

Coin Center filed its lawsuit challenging the Treasury Department’s authority to sanction the mixer. The advocacy group argued the agency had exceeded its statutory powers in targeting the decentralized protocol.

A Texas federal court had previously ordered the repeal of the sanctions earlier this year. The court ruled that OFAC’s actions violated the Administrative Procedure Act.

Market Response to Legal Victory

The TORN token, associated with Tornado Cash, responded positively to the news. The token price increased over 3% to trade at $9.44 following the dismissal announcement.

Trading volume for TORN surged 154% as investors reacted to the legal development. The token had previously spiked 180% in March when sanctions were first lifted.

The price had reached over $10 before settling back to current levels. Market participants viewed the formal end of the legal challenge as removing regulatory uncertainty.

Criminal Case Against Roman Storm Continues

Despite the civil case resolution, criminal proceedings against Tornado Cash co-founder Roman Storm continue. Storm faces trial in New York federal court next week on money laundering and sanctions violation charges.

Prosecutors have charged Storm with conspiracy to launder money and violating US sanctions. He also faces charges related to transferring criminal proceeds through the mixing service.

If convicted on all charges, Storm could face up to 45 years in prison. The criminal case proceeds separately from the now-dismissed civil sanctions challenge.

Another co-founder, Alexey Pertsev, was convicted of money laundering in the Netherlands. He received a 64-month prison sentence, while the third co-developer Roman Semenov remains at large.

The criminal charges focus on the developers’ alleged role in facilitating money laundering through the service. This differs from the civil sanctions challenge which questioned OFAC’s authority to target the protocol itself.

Storm’s defense team has argued that writing code for a decentralized protocol should not constitute criminal activity. The case will test how US courts apply traditional financial crime laws to cryptocurrency developers.

The trial comes as the broader crypto industry watches for signals about regulatory enforcement priorities. The outcome could influence how authorities approach cases involving decentralized finance protocols.