A recent Texas court ruling permanently blocks the US Treasury from re-listing the crypto mixer Tornado Cash on its sanctions list.
Following a decision by a federal court in Texas on Monday, the cryptocurrency mixing service Tornado Cash is now shielded from being added back to the sanctions list maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
This ruling establishes a significant legal barrier against future sanctions against the platform.
Background: Initial Sanctions and Recent Delisting
The Treasury initially placed Tornado Cash on its sanctions list in 2022.
At the time, OFAC alleged the service facilitated the laundering of approximately $7 billion, including funds associated with entities like the Lazarus Group from North Korea.
Only last month, after prolonged legal challenges, OFAC removed Tornado Cash from this sanctions list.
Treasury’s “Mootness” Argument Rejected
After the delisting, the Treasury Department contended that the legal case regarding the sanctions was effectively “moot,” implying no further judicial ruling was necessary.
This position left open the potential for Tornado Cash to be re-designated for sanctions in the future.
The U.S. District Court for the Western District of Texas dismissed this argument in its latest ruling.
The court indicated concern that the Treasury might attempt to reinstate the “precisely the same [designation]” later on.
Permanent Injunction Issued Against Treasury
Judge Robert Pitman pointed out that the Treasury described its choice to remove Tornado Cash from the list as a matter of “discretion” based on policy, instead of recognizing it was following a previous order from the Fifth Circuit court.
Consequently, Judge Pitman updated the ruling with amendments that now “permanently enjoined” the Treasury Department from reimposing the sanction against Tornado Cash.
Furthermore, the ruling explicitly deemed the Treasury’s previous enforcement actions related to this sanction as “unlawful.”
Also Read: Tornado Cash’s token Torn’s 700% increase following a significant legal victory
