{"id":35360,"date":"2025-01-22T19:00:14","date_gmt":"2025-01-22T16:00:14","guid":{"rendered":"https:\/\/coinengineer.net\/blog\/?p=35360"},"modified":"2025-01-22T14:57:42","modified_gmt":"2025-01-22T11:57:42","slug":"us-court-overturns-tornado-cash-sanctions","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/us-court-overturns-tornado-cash-sanctions\/","title":{"rendered":"US Court Overturns Tornado Cash Sanctions"},"content":{"rendered":"

As a victory for crypto privacy technologies, a US court in Texas<\/strong> has overturned the Tornado Cash<\/strong><\/a> sanctions.<\/p>\n

A US court<\/strong> has overturned the sanctions against the Tornado Cash<\/strong> cryptocurrency mixing protocol in a ruling that could signal a significant shift toward more innovation-friendly regulations for privacy-preserving technologies.<\/p>\n

The US Treasury\u2019s Office of Foreign Assets Control (OFAC)<\/strong> originally sanctioned Tornado Cash<\/strong> in August 2022, accusing it of facilitating money laundering by the North Korean Lazarus Group<\/strong>. The group was alleged to have laundered over $455 million in stolen digital assets through the protocol.<\/p>\n

The sanctions led to the arrest of Tornado Cash<\/strong> developer Alexey Pertsev<\/strong>, who was found guilty of money laundering by Dutch judges at the s-Hertogenbosch Court of Appeal on May 14, 2024. Pertsev<\/strong> was sentenced to five years and four months in prison for laundering $1.2 billion in illicit assets through the platform.<\/p>\n

In a significant legal development, the US District Court for the Western District of Texas<\/strong> reversed the OFAC<\/strong> sanctions, according to a Jan. 21 court filing. The court ruled:<\/p>\n

\u201cIt is ordered and adjudged that the judgment of the district court is reversed, and the cause is remanded to the district court for further proceedings in accordance with the opinion of this court.\u201d<\/p><\/blockquote>\n

Despite the victory for Tornado Cash, Pertsev<\/strong> remains in custody on money laundering-related charges.<\/p>\n

During his trial in March 2024, Pertsev<\/strong> argued that he could not be held liable for the actions of users who used the Tornado Cash<\/strong> protocol for illegal activities.<\/p>\n

The court rejected this defense, stating that Pertsev<\/strong> and the other co-founders of Tornado Cash could have implemented additional measures to prevent misuse of the protocol.<\/p>\n

OFAC “overstepped” Its Congressional Authority: Tornado Cash Plaintiffs<\/h2>\n

The court ruling comes after six Tornado Cash users<\/strong> filed an appeal against OFAC\u2019s sanctions<\/strong>.<\/p>\n

The appeal, issued on Nov. 26, 2024, argued that OFAC overstepped its \u201cstatutory authority\u201d by blacklisting Tornado Cash in 2022. The filing stated:<\/p>\n

\u201cWe hold that Tornado Cash\u2019s immutable smart contracts (the lines of privacy-enabling software code) are not the \u201cproperty\u201d of a foreign national or entity, meaning (1) they cannot be blocked under IEEPA, and (2) OFAC overstepped its congressionally defined authority.\u201d<\/p><\/blockquote>\n

The six plaintiffs also argued that blockchain transactions can be traceable, which is why some crypto users \u201cwant additional options to keep their transactions private.\u201d<\/p>\n

The Tornado Cash<\/strong> sanctions raised significant concerns for developers of privacy-preserving technologies.<\/p>\n

Matthew Niemerg<\/strong>, co-founder and president of AlephZero<\/strong>, stated that offering privacy-preserving features in a legally compliant manner will be crucial for the success of future privacy protocols.<\/p>\n

\n

Also, you can freely share your thoughts and comments about the topic in the comment section. Additionally, please follow us on our\u00a0Telegram<\/strong>,\u00a0<\/a>YouTube\u00a0<\/strong><\/a>and\u00a0Twitter<\/strong><\/a>\u00a0channels for the latest\u00a0news<\/a>\u00a0<\/strong>and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

As a victory for crypto privacy technologies, a US court in Texas has overturned the Tornado Cash sanctions. A US court has overturned the sanctions against the Tornado Cash cryptocurrency mixing protocol in a ruling that could signal a significant shift toward more innovation-friendly regulations for privacy-preserving technologies. The US Treasury\u2019s Office of Foreign Assets<\/p>\n","protected":false},"author":29,"featured_media":35362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,657,2],"tags":[6114,11181,377,4565],"class_list":["post-35360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-en","category-news","tag-alexey-pertsev","tag-office-of-foreign-assets-control-ofac","tag-tornado-cash","tag-us-court"],"yoast_head":"\nUS Court Overturns Tornado Cash Sanctions - Coin Engineer<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/us-court-overturns-tornado-cash-sanctions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Court Overturns Tornado Cash Sanctions - Coin Engineer\" \/>\n<meta property=\"og:description\" content=\"As a victory for crypto privacy technologies, a US court in Texas has overturned the Tornado Cash sanctions. 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