US Federal Court Denies Appeal To Lift Tornado Cash Sanctions

US District Judge Robert Pitman has dismissed an appeal filed by six Tornado Cash users who sought to lift sanctions placed on the controversial cryptocurrency mixer.

The United States Treasury’s Office of Foreign Assets Control had added Tornado Cash to its SDN list in August 2022, alleging it had enabled billions in illicit funds.

Court Upholds Treasury Department’s Sanctions

A federal court has upheld the Treasury Department’s decision to impose sanctions on cryptocurrency mixer Tornado Cash, throwing out the legal challenge brought by several users of the mixing service. The judge sided with the government and the Treasury Department on all of its claims and also granted summary judgment in the case. This reinforced the fact that the Treasury’s Office of Foreign Assets Control is entitled to sanction Tornado Cash under current sanction statutes. Furthermore, the court denied the summary judgment requested by the plaintiffs. The court filing stated,

“The Court finds that Tornado Cash is an association within the ordinary meaning of the term and is, therefore, an entity that may be designated per OFAC regulations.”

The Plaintiff’s Argument

The plaintiffs in the case, six users of Tornado Cash, had stated that the government’s action to sanction the cryptocurrency mixer was unlawful because it violated the first amendment. The plaintiffs argued that because of the decision, they were being denied the ability to engage in socially valuable speech. This is because they would have used Tornado Cash to donate to several social and political causes.

However, Judge Pitman disagreed with this argument, stating that the plaintiffs had failed to show that the action taken by the government had, in any way, implicated the first amendment. The plaintiffs also pointed out that there is significant confusion regarding what Tornado Cash really is, stating,

“The parties disagree on how to characterize Tornado Cash. Plaintiffs contend that Tornado Cash is a decentralized, open-source software project comprised of a subset of smart contracts, or “pools,” on the Ethereum blockchain.”

The plaintiffs also argued against classifying Tornado Cash as an a

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Author: Amara Khatri

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