EddieJayonCrypto
27 Nov 24
A US federal appeals court has overturned the Treasury Department's sanctions on Tornado Cash, a popular crypto-mixing service. The court ruled that the Treasury's Office of Foreign Assets Control (OFAC) overstepped its authority, emphasizing that Tornado Cash's smart contracts cannot be considered ...
The Fifth Circuit Court of Appeals has overturned the Treasury Department's sanctions against Tornado Cash, citing the autonomy of smart contracts and their lack of ownership. This ruling has sparked debates about regulating blockchain tools and their potential misuse by bad actors. Coinbase's Chief Legal Officer has praised the decision, emphasizing the importance of distinguishing tools from their misuse. However, critics argue that the ruling could embolden bad actors to exploit blockchain technology further. The decision exposes challenges in applying existing legal frameworks to decentralized technologies, prompting calls for US lawmakers' scrutiny. The ruling does not shield Tornado Cash from other legal challenges, and its founders face accusations of facilitating money laundering. Despite this, the TORN token has surged almost 400% following the ruling, reflecting investor optimism about the protocol's potential resurgence and its implications for DeFi projects. A US federal appeals court overturned the Treasury Department's sanctions on Tornado Cash, a popular crypto-mixing service. The ruling emphasizes that Tornado Cash's smart contracts cannot be considered property under the International Emergency Economic Powers Act (IEEPA) and reignites debates about regulating blockchain tools in connection with criminal activities. The court found that the immutable smart contracts underpinning Tornado Cash do not meet the legal definition of "property" because they cannot be owned, controlled, or restricted. Coinbase's Chief Legal Officer hailed the ruling as a historic win for crypto and emphasized the importance of distinguishing between tools and their misuse. The decision exposes the challenges of applying existing legal frameworks to decentralized technologies and prompts calls for scrutiny by US lawmakers. Critics argue that the ruling could embolden bad actors to exploit blockchain technology further, while some lawmakers have previously urged the Treasury to adopt stricter measures against crypto mixers. Privacy advocates emphasize the principles of decentralization and privacy, while acknowledging that regulatory risks for Tornado Cash remain. The court's decision does not shield Tornado Cash from other legal challenges, particularly those concerning its founders, who face accusations of facilitating money laundering. Despite this, the TORN token has surged almost 400% following the ruling, reflecting investor optimism about the protocol's potential resurgence and its implications for DeFi projects.