OFAC Cannot Renew Tornado Money Punishment

A federal judge has declared a permanent end to the U.S. Treasury’s authority to rescind Tornado Cash, making it a clear victory for crypto privacy advocates.

On Monday, Judge Robert Pitman of the U.S. District Court for the Eastern District of Texas updated and finalized modifications, deciding that the Treasury’s steps were “unlawful” and issuing an order that makes it “permanently enjoined from enforcing it.”

After the government freely lifted the sanctions against Tornado Cash in March, the decision expressly rejected the president’s attempt to avoid a last judgment.

Following the 5th Circuit’s decision in November, Coinbase’s Chief Legal Officer Paul Grewal shared a copy of the amended decisions on Twitter.” After the 5th Circuit ruled against the state, it constantly tried to avoid a last judgment. The Court has rejected this absurdity now.

According to Grewal, the Office of Foreign Assets Control ( OFAC ) would now be legally barred from “re-instating the original sanctions” as a result of the decision.

a legal proceeding

Following their “discretionary” withdrawal of Tornado Cash, Treasury officials claimed the circumstance was debate.

However, Judge Pitman cited a precedent, stating that Treasury officials may” seek to “recreate precisely the same]designation ]” in the future.

This records for the next section of the prosecutor’s mootness different evaluation, which allowed the situation to obtain a final judgment.

A “mootness different test” assists courts in deciding whether to act on cases yet after issues appear to have been resolved.

Three days after the DOJ made the announcement that it would no more pursue criminal charges against crypto-ming services, unless they are involved in criminal activity.

Smart agreements are not real estate.

The case was brought on by OFAC’s decision to punishment Tornado Cash in August 2022, which included it on its list of Especially Designated Nationals and Blocked Persons.

OFAC claimed that Tornado Cash assisted in more than$ 7 billion in money laundering, including funds linked to North Korean hackers.

For the first time, U.S. government approved open-source software methods rather than people or organizations.

The Fifth Circuit Court of Appeals ruled that OFAC had overstepped its purview under the Global Emergency Economic Powers Act in November 2024.

The court at the time ruled that eternal smart contracts “are certainly property because they are not capable of being owned,” adding that over a thousand individuals held a” trusted setup ceremony” that prevented any changes or controls on Tornado Cash’s core software.

The Fifth Circuit’s decision could have a bearing on how distributed finance services are handled by U.S. law, potentially changing how regulators react to distributed finance services.