A federal court has upheld the authority of the U.S. Treasury Department to impose sanctions on the cryptocurrency mixer Tornado Cash, dismissing a legal challenge from its users.
The Court Ruled In Favor Of The Government's Claims
A federal court has upheld the authority of the U.S. Treasury Department to impose sanctions on the cryptocurrency mixer Tornado Cash, dismissing a legal challenge from its users.
The court ruled in favor of the government's claims and granted summary judgment in favor of the Treasury's Office of Foreign Assets Control (OFAC), affirming its right to apply sanctions against Tornado Cash under existing statutes.
U.S. District Judge Robert Pitman rejected the claims made by six Tornado Cash users who argued that the government's actions violated their First Amendment rights, contending that their use of Tornado Cash was intended for socially valuable purposes like political and social donations. Judge Pitman disagreed with this assertion, stating that the government's actions did not infringe upon the First Amendment.
The court case originated after the Treasury Department added Tornado Cash to its list of Specially Designated Nationals and Blocked Persons in response to allegations that the service laundered over $7 billion worth of virtual currency, including facilitating transactions for North Korean hackers.
Judge Pitman ruled that Tornado Cash qualified as an "association" subject to sanctions under the International Emergency Economic Powers Act, and the smart contracts it deployed were deemed "property" that could be sanctioned under OFAC's regulatory framework.
