Tornado Cash Lawsuit: US Treasury Declares Case Moot After Sanctions Lifted

Tornado Cash Lawsuit: Is the Crypto Mixer’s Legal Battle Over?

Tornado Cash Lawsuit – The US Treasury Department has declared the lawsuit regarding its sanctioning of Tornado Cash moot after removing the crypto mixer from its sanctions list. In a move on March 21, the Treasury’s Office of Foreign Assets Control (OFAC) lifted the sanctions on Tornado Cash, which had been accused of helping North Korean hackers, the Lazarus Group, launder stolen cryptocurrency.

Legal Background and Treasury’s Stance

In August 2022, OFAC sanctioned Tornado Cash, leading to a lawsuit from several users who claimed that the sanction was unlawful. After a court ruled in favor of Tornado Cash, the US Treasury decided to drop the mixer and associated smart contract addresses from the Specially Designated Nationals (SDN) list. The Treasury now argues that the case is “moot” since it has removed Tornado Cash from the sanctions list. According to the Treasury, there is no longer a need for further court action.

However, Coinbase’s chief legal officer, Paul Grewal, contested the Treasury’s argument, stating that the attempt to declare the case moot was not in line with legal procedure. Grewal referenced a 2024 Supreme Court ruling, which determined that a legal complaint does not become moot simply because the defendant removed the sanction, as the risk of reinstating the action still exists.

Tornado Cash’s Legal Journey

The legal battle began in September 2022 when six Tornado Cash users, including Ethereum developer Preston Van Loon, filed a lawsuit against the Treasury. They were backed by Coinbase and argued that the sanctions were unlawful. The case has undergone several phases, with the Treasury attempting to challenge rulings in favor of Tornado Cash.

Despite the legal struggles, the founders of Tornado Cash are still facing criminal charges, with Roman Storm and Roman Semenov charged in August 2023 for allegedly laundering over $1 billion in crypto. Meanwhile, Alexey Pertsev, a Tornado Cash developer, was released from Dutch prison after his pretrial detention was suspended.

As the legal battles continue, Tornado Cash’s case remains an important precedent in the ongoing debate over privacy in the crypto world.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.