Tornado Cash Users File Appeal in Federal Court
A group of Tornado Cash users has filed an appeal in federal court following a ruling upholding the United States Treasury Department’s decision to add the cryptocurrency mixer to its list of sanctioned entities. In a Nov. 13 filing in the U.S. Court of Appeals for the Fifth Circuit, lawyers representing plaintiffs Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale and Nate Welch argued that the U.S. Treasury “stretched [its] authority beyond recognition” in sanctioning Tornado Cash transactions.
The district court erred by concluding that the Department satisfied three of the requirements for a designation under International Emergency Economic Powers Act and the North Korea Act,” said the Nov. 13 filing. “The Department’s action is contrary to law and in excess of statutory authority under the Administrative Procedure Act.”
According to the plaintiffs, smart contracts under Tornado Cash identified in the lawsuit were “immutable and ownerless” and failed to meet the U.S. Treasury’s regulatory definition of “property” subject to sanctions.
Coinbase Supports Plaintiffs’ Efforts
Coinbase chief legal officer Paul Grewal said in a Nov. 13 X (formerly Twiter) thread that he supported the efforts of the plaintiffs, saying the appellate court would carefully consider the filing. The crypto exchange has been publicly supporting Van Loon and the other plaintiffs since the September 2022 lawsuit.
Ordinary Americans do extraordinary and admirable things. With the support of @coinbase and many others, today the Loon plaintiffs took their case to the 5th Cir. to challenge sanctions against the ownerless, immutable software known as Tornado Cash. 1/6
— paulgrewal.eth (@iampaulgrewal) November 13, 2023
Crypto Advocacy Group Coin Center’s Lawsuit
Crypto advocacy group Coin Center, which filed its own lawsuit against the U.S. Treasury over Tornado Cash in October 2022, similarly lost its case in Florida federal court. The group filed an appeal in the U.S. Court of Appeals for the Eleventh Circuit on Nov. 6.
Criminal Charges Against Tornado Cash Individuals
U.S. authorities have also pursued criminal charges against individuals involved with Tornado Cash. In August, the Justice Department charged co-founders Roman Storm and Roman Semenov with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money-transmitting business.
Storm was released on a $2-million bond following his arrest and pleaded not guilty to all charges in September, while Semenov was not in custody at the time of publication.
Hot Take: Legal Battle Over Tornado Cash Continues
The legal battle over Tornado Cash continues as users file an appeal in federal court challenging its sanctioning by the U.S. Treasury Department. This move follows criminal charges against individuals connected with Tornado Cash and highlights ongoing efforts by various parties to contest regulatory actions related to cryptocurrency mixers.
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