Federal Court Upholds US Treasury’s Sanctions on Tornado Cash
A federal court has ruled in favor of the US Treasury Department’s right to impose sanctions on cryptocurrency mixer Tornado Cash. The Office of Foreign Assets Control (OFAC) accused Tornado Cash of laundering over $7 billion in cryptocurrencies and being used by malicious actors like North Korea’s Lazarus Group. The court dismissed a lawsuit filed by six users, including two Coinbase employees, denying their request for summary judgment. The court affirmed that OFAC’s determinations on Tornado Cash are valid and that the agency is entitled to impose sanctions on it.
Key Points:
- The US Treasury accused Tornado Cash of laundering over $7 billion in cryptocurrencies.
- Tornado Cash was allegedly used by malicious actors like North Korea’s Lazarus Group.
- The court dismissed a lawsuit filed by six users, including two Coinbase employees.
- The court affirmed OFAC’s right to impose sanctions on Tornado Cash.
- The users argued that the government’s actions violated the First Amendment, but the court disagreed.
Chief officer of Coinbase, Paul Grewal, stated that the company continues to support the plaintiffs’ challenge to OFAC’s actions. However, the Treasury Department spokesperson expressed satisfaction with the court’s opinion, stating that it is crucial to disrupt North Korea’s ability to generate revenue through cybercrime. The sanction on Tornado Cash comes as illicit addresses account for a significant portion of funds sent to crypto mixers, prompting government agencies to take action against non-compliant mixers and impose sanctions.
Hot Take:
The federal court’s ruling upholding the US Treasury’s sanctions on Tornado Cash highlights the government’s efforts to combat money laundering and cybercrime in the crypto space. It sets a precedent for holding mixers accountable for facilitating illicit activities. However, the decision also raises questions about the balance between regulatory measures and individual freedoms in the cryptocurrency ecosystem.
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