A Texas District Court has lifted the sanctions on Tornado Cash. This means that the penalties imposed by the Treasury's Office of Foreign Assets Control (OFAC) are now null and void.
Following this news, the TORN token, which powers the Tornado Cash ecosystem, jumped by as much as 140%!
The court ruled against the US Treasury’s sanctions on Tornado Cash, a service that lets users anonymize their cryptocurrency transactions using smart contracts. The court stated that OFAC cannot sanction “property” that is autonomous and immutable code, which no one can control.
Specifically, the court found that these smart contracts cannot be considered “property” because no one owns or controls them. Tornado Cash’s smart contracts are designed to operate without human intervention. They are deployed on the Ethereum blockchain, are unchangeable, and accessible to everyone. The court decided that such contracts do not fit the legal definition of “property.”
This aligns with a November ruling from a US appellate court, which also stated that Tornado Cash’s smart contracts are not property. The court emphasized that OFAC overstepped its authority and highlighted that these smart contracts cannot be viewed as property under the International Emergency Economic Powers Act (IEEPA).
In 2022, OFAC sanctioned Tornado Cash, claiming it was a tool for illicit actors, including North Korea’s Lazarus Group, to launder stolen funds. This raised important questions about privacy, regulation, and the future of decentralized finance.
However, the court’s decision does not protect Tornado Cash from other legal challenges, especially those involving its founders. Developer Alexey Pertsev took to X (Twitter) to thank crypto executives for their support in his ongoing legal issues. Notable figures like Ethereum co-founder Vitalik Buterin donated 30 ETH to Pertsev’s legal defense fund, along with Gnosis executive Stefan George.
Pertsev expressed his gratitude, saying, “I would like to thank everyone, especially Vitalik Buterin and Stefan George, for your incredible generosity to my defense. Your support inspires me to move forward, and I’m forever grateful. While the legal battle is far from over, I’m hopeful that 2025 brings positive developments.”
This ruling has caught attention, especially after the recent presidential pardon of Silk Road’s Ross Ulbricht and calls for clemency for “Bitcoin Jesus,” Roger Ver. Now, crypto enthusiasts are advocating for amnesty for Roman Storm, one of Tornado Cash’s executives.
One crypto executive stated, “Now pardon Roman Storm and all the other unfairly persecuted software engineers who are helping shape this country into what we need it to be.”
On the news of the court's decision, Tornado Cash’s token, TORN, surged by 140%. As of now, it is trading at $18.50, reflecting an increase of about 122% after some price adjustments.