The crypto advocacy group said OFAC must act within its statutory authority by sanctioning bad actors, not open-source software tools.
The Blockchain Association has thrown fresh support behind six plaintiffs suing the United States Treasury Office of Foreign Assets Control (OFAC) over its sanctions on the crypto mixer Tornado Cash.
In a Nov. 20 amicus curiae brief to a U.S. appellate court, the crypto advocacy group argued OFAC’s decision to sanction the privacy protocol was not only unlawful but exceeded its statutory authority and was both “arbitrary and capricious” — contrary to the U.S. Constitution.
It’s the second amicus brief filed by the Blockchain Association supporting a group of Tornado Cash users appealing a lower court’s ruling that upheld OFAC’s decision to add the cryptocurrency mixer to its list of sanctioned entities.
Today we filed an amicus brief in the 5th Circuit appeal of Van Loon v. Treasury regarding OFAC’s sanctions against Tornado Cash.
— Blockchain Association (@BlockchainAssn) November 20, 2023
Read Senior Counsel @MTCoppel's thread below for more. https://t.co/1pmSAt1Bds https://t.co/c5ScaTDr9N pic.twitter.com/e9ySvcKdeM
Blockchain Association senior counsel Marisa Coppel emphasized in a Nov. 20 statement that OFAC needs to focus on sanctioning bad actors rather than outright banning tools, which she claimed it has no authority over.
“OFAC must see Tornado Cash for what it is: a tool that can be used by anyone,” Coppel said. “Rather than sanctioning a tool with a lawful purpose, OFAC should remain focused on the bad actors that misuse such tools.”
“OFAC’s action sets a dangerous new precedent that drastically exceeds their authority and jeopardizes law-abiding Americans’ right to privacy.”
In its brief, the Blockchain Association suggested OFAC should act within the bounds of the law by seeking approval from Congress to ban crypto mixers such as Tornado Cash.
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“The proper remedy is to seek legislation from Congress that would provide supplemental authority in the uniquely decentralized digital asset context — not to improperly stretch its existing authorities,” it said.
“Such a power-grab would be a slippery slope that could threaten all manner of internet-based tools that have heretofore been freely available.”
The Blockchain Association has long held that Tornado Cash has no owner or operator and can function automatically without human intervention or assistance.
5/ OFAC’s authority only extends to persons or property…the Tornado Cash software is neither.
— Marisa Tashman Coppel (@MTCoppel) November 20, 2023
There is no owner.
No operator.
It functions autonomously.
And immutably.
OFAC first sanctioned Tornado Cash in August 2022. It alleged that individuals and groups had used the mixer to launder more than $7 billion in cryptocurrencies since 2019, including the $455 million stolen by the North Korea-affiliated Lazarus Group.
Crypto exchange Coinbase also backed the suit, pledging to
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