A federal appeals court in the United States has overturned the sanctions imposed on Tornado Cash, a service that anonymizes cryptocurrency transactions. This decision has put an end to the debate surrounding the legality of targeting such technologies that are often associated with criminal activities. The court ruled that the smart contracts of Tornado Cash cannot be considered the ‘property’ of a foreign entity, and therefore cannot be blocked under the International Emergency Economic Powers Act.
Previously, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) had sanctioned Tornado Cash, claiming it was being used by malicious actors like North Korea’s Lazarus Group to launder stolen crypto assets. However, Coinbase Inc. and other parties sued the government, arguing that the sanctions were an overreach of authority. The recent court ruling has been celebrated as a victory for privacy and the crypto community, allowing U.S. persons to once again use the privacy-protecting protocol.
The court acknowledged the challenges posed by rapidly evolving technology and emphasized the importance of upholding the statutory framework established by Congress. Following the ruling, the price of Tornado Cash’s TORN token surged by over 500%, reaching above $20. This marks a significant recovery for the token, which had faced legal obstacles and restrictions due to the sanctions imposed by the U.S. Treasury Department.
In conclusion, the court’s decision to overturn the sanctions on Tornado Cash reflects a broader conversation around the regulation of emerging technologies and the balance between privacy and security. The ruling has been hailed as a victory for crypto advocates and a step towards clarifying the legal boundaries in the rapidly evolving digital landscape.