TORN Spikes 5% After U.S. Appeals Court Okays End of Another Tornado Cash Lawsuit
The price of Tornado Cash (TORN) experienced a near 5% increase on Monday, following an Eleventh Circuit Court of Appeals decision to dismiss a lawsuit against the U.S. Treasury Department. This ruling effectively concludes a legal battle initiated by Coin Center, a cryptocurrency advocacy group, challenging the Treasury Department’s sanctions against Tornado Cash.
The appeals court’s decision stemmed from a joint motion filed by Coin Center and the Treasury Department in June. This motion requested the vacation of a Texas district court’s April ruling, which deemed OFAC’s (Office of Foreign Assets Control) sanctioning of Tornado Cash unlawful. Both parties agreed that dismissal was the optimal course of action, despite differing reasons: Coin Center cited the appeal’s mootness after the Texas court’s judgment became final and unappealable in June, while the government pointed to OFAC’s rescission of the designation as rendering the appeal moot.
The Eleventh Circuit’s ruling aligns with OFAC’s March decision to remove Tornado Cash from its sanctions list, following a Fifth Circuit appeals court ruling against sanctioning smart contracts. A subsequent April ruling by a Fifth Circuit district court judge further solidified this position, preventing OFAC from re-imposing sanctions. After several extensions, this decision became legally binding on June 28th, with the government choosing not to appeal.
Coin Center’s Executive Director, Peter Van Valkenburgh, celebrated the outcome, emphasizing the definitive end to the legal challenge and the government’s abandonment of its broad interpretation of sanctions laws. The court battle centered on the legal authority underpinning the Tornado Cash sanctions. The government’s decision not to appeal signifies a significant victory for Coin Center and the cryptocurrency community, clarifying the limits of OFAC’s authority to sanction decentralized technologies.
It is important to note that despite the conclusion of this civil case, the U.S. government continues its criminal prosecution of Tornado Cash developers, Roman Storm and Roman Semenov, on money laundering charges. Storm’s trial is scheduled for June 14th in New York. The resolution of the civil case, however, offers clarity regarding the legal framework surrounding the sanctioning of decentralized technologies like Tornado Cash.
