The U.S. District Court for the Western District of Texas overturned the sanctions against the decentralized cryptocurrency mixer Tornado Cash, which had been on the “blacklist” of the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury since 2022. The sanctions were imposed due to accusations of Tornado Cash being used by the North Korean hacker group Lazarus Group to launder stolen cryptocurrency.
Following this decision, the price of the native token TORN rose by 300%, rising from $9.5 to $28.
The main issue of the case concerned the Tornado Cash technology, which is based on smart contracts that cannot be altered or controlled by any person or organization. The court ruled that these contracts are not property according to the International Emergency Economic Powers Act (IEEPA), under which OFAC imposed sanctions. Since smart contracts are immutable and decentralized, they are considered “incapable of being owned” and cannot be subject to sanctions, as is the case with individuals or companies.
The court noted that the government exceeded its authority, as the attempt to regulate decentralized technologies goes beyond its jurisdiction. The decision emphasized that the Department of the Treasury does not have the right to impose sanctions on technologies that operate autonomously without human intervention.
The court’s decision was a victory for privacy advocates, who see it as an important step in supporting decentralization and financial privacy. It had a positive impact on the prices of privacy coins such as Monero and Zcash.
Recall that on the eve, by his order, the 47th President of the USA Donald Trump pardoned the head of the darknet market Silk Road Ross Ulbricht.
Spelling error report
The following text will be sent to our editors: