TORN surges 400% as court rules against US Treasury sanctions on Tornado Cash

The federal appeals court ruled against the US Treasury Department’s sanctions on Tornado Cash in an appeals court in New Orleans on Tuesday, November 26.

The three-judge panel determined that the Treasury exceeded its legal authority by sanctioning the software itself rather than specific individuals or entities.

The court held that Tornado Cash software code cannot be classified as “property” that can be sanctioned. Coinbase supported the legal challenge, arguing against the blanket blocking of open source technology.

Code cannot be sanctioned

Circuit Judge Don Willett said the US government’s concerns about money laundering by foreign actors through the crypto mixer are “undeniably legitimate.” However, federal law only gives the Treasury Department the authority to take action against the property, Bloomberg reported.

“Perhaps Congress will update (the law), enacted during the Carter Administration, to target modern technologies such as cryptographic mixing software,” Willett said before adding:

“Until then, we maintain that Tornado Cash’s immutable smart contracts are not the ‘property’ of a foreign national or entity, meaning they cannot be blocked.”

The Treasury Department’s Office of Foreign Assets Control (OFAC) originally sanctioned Tornado Cash in 2022, alleging that it was used to launder more than $7 billion in crypto, including $455 million by groups of piracy associated with North Korea.

It’s “unbelievable the degree to which crypto is killing it in the federal courts,” exclaimed Uniswap founder Hayden Adams.

Meanwhile, Coinbase’s chief legal officer, Paul Grewal, said that “privacy wins” before adding that this is “a historic victory for crypto and everyone who cares about defending freedom.”

“These smart contracts must now be removed from the sanctions list and US citizens will be able to use this privacy protection protocol again. In other words, the overreach of the government will not be maintained.”

“No one wants criminals to use cryptographic protocols, but completely blocking open source technology because a small portion of users are bad actors is not what Congress authorized,” he added.

Privacy wins. Today the Fifth Circuit celebrated it @USTreasurySanctions against Tornado Cash smart contracts are illegal. This is a historic victory for crypto and everyone who cares about defending freedom. @coinbase is proud to have helped lead this important challenge. 1/6

— paulgrewal.eth (@iampaulgrewal) November 26, 2024

Price increase BACK

Tornado Cash native token TORN rose more than 850% on the verdict, from $3.60 to $35 in early trading in Asia.

TORN has since retreated to around $18 at the time of writing, which is still up more than 400% over the past 24 hours.

However, the crypto-mixer token remains 96% below its February 2021 all-time high of $436, according to Coingecko.

Tornado Cash $TURN surged as much as 700% after US court sanctions against crypto mixer Tornado Cash were found to be illegal. pic.twitter.com/yLxPMAomjX

— CoinGecko (@coingecko) November 27, 2024

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