Tornado Cash token surges to 2-year high after US court rules Treasury sanctions unlawful Legal 8 hours ago

The price of Tornado Cash’s TORN token skyrocketed to a two-year high after a US federal appeals court ruled that the US Treasury Department’s sanctions on the platform were unlawful.Tornado Cash is an on-chain privacy tool that uses immutable smart contracts to enable anonymous crypto transactions.The platform was sanctioned in 2022 by the US Treasury’s Office of Foreign Assets Control (OFAC). It alleged that it aided the laundering of over $7 billion in crypto, including stolen funds, by hacking groups linked with North Korea.On Nov. 26, the US Court of Appeals determined that the Treasury exceeded its authority by sanctioning Tornado Cash’s immutable smart contracts. As open-source software, these contracts do not belong to any person or foreign entity and, therefore, cannot be subjected to sanctions.The court highlighted a critical 2020 event called the “trusted setup ceremony,” where over 1,000 participants contributed cryptographic data to finalize Tornado Cash’s parameters. This process rendered the smart contracts immutable, eliminating any form of updates or administrative control. Governance was later handed to the Tornado Cash community through the TORN token.The judges ruled that these contracts operate autonomously and do not meet the legal definition of property or services under the International Emergency Economic Powers Act (IEEPA). They also pointed out that the smart contracts have continued to operate despite the OFAC’s sanction.Consequently, OFAC cannot sanction them unless Congress updates the law to account for technologies like crypto-mixing tools.The Judges stated:“We hold that Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the ‘property’ of a foreign national or entity, meaning they cannot be blocked under IEEPA, and OFAC overstepped its congressionally defined authority.”Following the ruling, data from CryptoSlate shows that TORN surged to a two-year high of $40 before falling back to around $18, marking a 400% increase within 24 hours. Despite this rally, the token remains 96% below its all-time high of $436 recorded in February 2021.The decision was widely celebrated within the crypto community., with industry leaders calling it a landmark victory for decentralized technologies and privacy rights.Coinbase’s Chief Legal Officer, Paul Grewal, emphasized that this ruling protects open-source software from unjust sanctions. He noted that while addressing illicit activities is essential, targeting decentralized protocols with blanket restrictions oversteps legal boundaries.He stated:“No one wants criminals to use crypto protocols, but blocking open source technology entirely because a small portion of users are bad actors is not what Congress authorized. These sanctions stretched Treasury’s authority beyond recognition, and the Fifth Circuit agreed.”Bill Hughes, Consensys’ senior counsel and director of global regulatory matters, explained that the judgment does not mean that the rest of Tornado Cash is also out of bounds for Treasury/OFAC. However, the issue was about smart contracts with no admin key.Hughes added:“[This is] a good win. One which the Supreme Court would be unlikely to reverse. Another case where Loper Bright helped because the court wasn’t required to defer to a permissible reading by the agency.”Oluwapelumi values Bitcoin’s potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.Also known as “Akiba,” Liam Wright is the Editor-in-Chief at CryptoSlate and host of the SlateCast. He believes that decentralized technology has the potential to make widespread positive change. Get the latest crypto news and expert insights. Delivered to you daily.Eric Balchunas believes that over 40 altcoin-related ETF listings can happen by the end of January.High-crypto areas see 250% increase in mortgages as low-income families leverage digital windfalls, Treasury report shows.Bitcoin sharp upside left no time for supply to change hands, creating an “air gap” region below $88,000.The ETP uses market cap weighting to give balanced and simplified exposure to Bitcoin and Ethereum to investors.CryptoSlate’s latest report dives deep into Polymarket’s evolution, its pivotal role in high-stakes prediction events like US elections, and the implications of its controversies on its market position.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.