A Win for Crypto Privacy
The U.S. Court of Appeals for the Fifth Circuit issued a ruling that the U.S. Treasury Department’s sanctions against cryptocurrency mixer Tornado Cash were illegal. According to a Nov. 26 ruling, the Treasury Department’s Office of Foreign Assets Control (OFAC) exceeded its congressionally mandated authority in sanctioning the Tornado Cash smart contract.
Additionally, the immutable smart contracts at the heart of Tornado Cash cannot be owned by anyone and are therefore not subject to OFAC’s property sanctions.
“We believe that Tornado Cash’s immutable smart contracts (lines of privacy-enabled software code) are not the “property” of foreign persons or entities, which means that (1) they cannot be blocked under IEEPA and (2) OFAC oversteps its mandate by Congress power to define,” court ruling famous.
A win for cryptographic privacy
The court’s ruling sanctioning Tornado Cash is a huge victory for the crypto-privacy industry that is under existential threat. Additionally, the smart contracts used by cryptocurrency mixers are open source and can be used by anyone, regardless of government sanctions.
“No one wants criminals to use cryptographic protocols, but completely blocking open source technology because a small percentage of users are bad actors is not what Congress mandated,” said Paul Grewal, chief legal officer at Coinbase Global.
Meanwhile, Tornado Cash protocol developer Alex Pertsev is currently seeking an appeal in the Netherlands after being found guilty of money laundering earlier this year and sentenced to 64 months in prison.
market impact
The Tornado Cash token rallied more than 10-fold following Tuesday’s ruling before cooling off during early Asian trading on Wednesday. According to the latest market data, the S-cap altcoin, which is valued at around $146 million on a fully diluted basis at the time of writing, has surged around 500% in the past 24 hours to trade around $20.66.
The multi-chain altcoin is signaling an imminent rally to all-time highs around $436, which were set during the 2021 bull run.
