U.S. Court Overturns Sanctions on Crypto Mixer Tornado Cash
The decision highlights key legal distinctions about software and property in cryptocurrency regulations
A U.S. District Court for the Western District of Texas has reversed sanctions previously imposed on the cryptocurrency mixer Tornado Cash by the Treasury’s Office of Foreign Assets Control (OFAC).
The decision marks a significant development in the legal treatment of privacy-focused technologies within the cryptocurrency ecosystem.
In August 2022, OFAC sanctioned Tornado Cash, alleging it facilitated money laundering activities, including laundering $455 million in stolen cryptocurrency by North Korea’s Lazarus Group. This led to the arrest of Tornado Cash developer Alexey Pertsev, who was later sentenced to over five years in prison by a Dutch court for his role in laundering illicit funds.
Reversal of Sanctions
On January 21, 2025, the court ruled that Tornado Cash’s immutable smart contracts could not be classified as “property” under the International Emergency Economic Powers Act (IEEPA). This act grants the President authority to block property linked to foreign interests.
The court highlighted that Tornado Cash’s immutable smart contracts, which operate without human intervention, do not fit the legal definition of “property” or “contracts” that involve mutual agreements between parties. The ruling stated:
“Immutable smart contracts have only one party in play … Tornado Cash, free of any human effort in execution, also does not qualify as a service.”
While OFAC expanded the definition of property to include “contracts of any nature,” the court determined this did not apply to Tornado Cash’s self-executing code.
Impact on Cryptocurrency Privacy
The decision was influenced by arguments from six Tornado Cash users, who filed a lawsuit claiming that OFAC exceeded its authority by sanctioning software rather than a person or entity. The plaintiffs also noted the importance of privacy in blockchain transactions, emphasizing that many users value options for confidential financial activity.
Following the court’s decision, Tornado Cash’s native cryptocurrency, TORN, surged by 140%, rising from $9.50 to over $23.
![U.S. Court Overturns Sanctions on Crypto Mixer Tornado Cash image 1](https://img.bgstatic.com/multiLang/image/social/64ae46a0e692ef0118f8c725c2ef73fa1737655891056.png)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Elon Musk’s D.O.G.E to shut down CFPB after success with USAID termination
Share link:In this post: Elon Musk’s DOGE team stormed the CFPB, gaining access to key internal systems as part of a broader plan to shut down the agency. Treasury Secretary Scott Bessent shut down CFPB communications after Elon’s operatives arrived, following Trump’s firing of its former director. DOGE already dismantled USAID, putting thousands of employees on leave and cutting $250 million in federal contracts across 35 agencies.
AI compute cannot create a new class system
Kaspersky Discovers SparkCat Malware Targeting Crypto Recovery Phrases
Arbitrum’s Balancer V3 is now live
Trending news
MoreCrypto prices
More![Bitcoin](https://img.bgstatic.com/multiLang/coinPriceLogo/bitcoin.png)
![Ethereum](https://img.bgstatic.com/multiLang/coinPriceLogo/ethereum.png)
![Tether USDt](https://img.bgstatic.com/multiLang/coinPriceLogo/0208496be4e524857e33ae425e12d4751710262904978.png)
![XRP](https://img.bgstatic.com/multiLang/coinPriceLogo/ripple.png)
![Solana](https://img.bgstatic.com/multiLang/coinPriceLogo/solana.png)
![BNB](https://img.bgstatic.com/multiLang/coinPriceLogo/binance.png)
![USDC](https://img.bgstatic.com/multiLang/coinPriceLogo/usdc.png)
![Dogecoin](https://img.bgstatic.com/multiLang/coinPriceLogo/dogecoin.png)
![Cardano](https://img.bgstatic.com/multiLang/coinPriceLogo/cardano.png)
![TRON](https://img.bgstatic.com/multiLang/coinPriceLogo/tron.png)