A federal court in Texas has ruled that the US Treasury Department’s actions against the Tornado Cash platform were illegal. The Office of Foreign Assets Control (OFAC) will no longer be able to reinstate or reimpose sanctions against Tornado Cash.
Tornado Cash users’ lawsuit
Tornado Cash users have filed a lawsuit against the US Treasury. They claim that the inclusion of one of the platform’s smart contract addresses on the SDN (Specially Designated Nationals and Blocked Persons) list was illegal.
Recall that OFAC imposed sanctions against Tornado Cash in August 2022. The Treasury Department accused the platform of facilitating the laundering of cryptocurrencies.
Delisting
The agency delisted the platform on March 21, stating that the issue was moot after a court ruling in Tornado Cash’s favor in January. The latest amended order prevents OFAC from reimposing sanctions on Tornado Cash.
Sanctions Reversal
The court initially denied a motion for partial summary judgment, but the Fifth Circuit reversed that decision. In March, the Treasury Department said it was not necessary to enter a final judgment on the lawsuit.
White House Petition
On April 28, the DeFi Education Fund petitioned White House crypto czar David Sacks to dismiss charges against Tornado Cash co-founder Roman Storm. Storm is charged with facilitating the laundering of more than $1 billion in cryptocurrency, with a trial scheduled for July.
The group said the Justice Department is attempting to criminally prosecute software developers for using their code, setting a precedent that could halt all crypto development in the U.S. The DeFi Education Fund opposes this approach and calls for the charges against Roman Storm to be reconsidered.
