Big victory in Tornado Cash case as judge says OFAC exceeded authority
A US appeals court ruled the Treasury’s OFAC “overstepped” when it sanctioned crypto mixer Tornado Cash’s smart contracts.
A United States appeals court has reversed a lower court’s decision, finding the Office of Foreign Assets Control (OFAC) exceeded its authority in sanctioning Tornado Cash’s immutable smart contracts — a major win for the protocol and its users.
In a Nov. 26 opinion, a Fifth Circuit Appeals Court three-judge panel said that while Treasury has the power to take action against “property,” Tornado Cash’s smart contracts were not property under the International Emergency Economic Powers Act (IEEPA) as they are immutable, meaning they can not be controlled or owned.
“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 (1) they cannot be blocked under IEEPA, and (2) OFAC overstepped its congressionally defined authority,” the trio of judges wrote.
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Author: Felix Ng
