Coinbase supports Tornado Cash users in their lawsuit against the Treasury Department


Six Tornado Cash users have filed a lawsuit against the U.S. Department of the Treasury and other authorities. They filed suit against the latter over the decision to ban Tornado Cash beginning in August 2022.

The plaintiffs filed a complaint against the Treasury Department, the Office of Foreign Assets Control, and their respective directors. These included Secretary of the Treasury Janet Yellen and Director of the Office Andrea M. Gacki.

Tornado Cash, a cryptocurrency exchange built on the Ethereum blockchain, was blacklisted by the Department of the Treasury’s Office of Foreign Assets Control on August 8. This was for laundering virtual currency valued at more than $7 billion since its establishment in 2019.

The office highlighted in particular the Lazarus Group’s theft of crypto assets worth $455 million. Tornado Cash enables users to pool their crypto holdings with those of other users. Consequently, it becomes impossible for anybody to follow the path of an asset.

In their case filed with the Texas District Court, the plaintiffs assert three allegations against the government.

First, Tornado Cash cannot be included in the Department of Treasury’s list of Specially Designated Nationals (SDN). This is due to the fact that it does not satisfy the criteria of a property, a foreign country, a citizen of that country, or a person. The Department added 44 Tornado Cash smart contract addresses to its list of SDNs.

The ruling also violates the First Amendment (freedom of speech). Tornado Cash enables people to participate in the significant, socially beneficial discourse. They may contribute to politically and socially significant, sometimes contentious issues. The punishment, however, prohibits them from doing so, therefore breaching their rights.

Thirdly, Tornado Cash comprises open-source software codes. These cannot be considered property, a foreign nation or its citizen, or any kind of person. Therefore, the Department cannot impose fines on them.

According to the complaint, the suspension “threatens the capacity of law-abiding Americans to participate in free and confidential financial transactions.”

The petitioners have argued that the Treasury’s decision to penalize Tornado Cash has restricted their lawful activities.

Also Read: Charles Hoskinson says that Bitcoin must adopt Cardano’s Ofelimous Protocol

Leave A Reply

Your email address will not be published.