Crypto Advocates Continue to Battle Against ‘Unjust’ Tornado Cash Sanctions

The Blockchain Association and DeFi Education Fund Support Coin Center’s Lawsuit

The Blockchain Association and the DeFi Education Fund have joined forces to show their support for Coin Center’s legal action against the United States Treasury regarding the “unlawful” sanctions imposed on Tornado Cash. On June 2, these two prominent cryptocurrency industry advocacy groups filed a joint amicus brief, urging the dismissal of the U.S. sanctions targeting the crypto mixer.

Both associations argue that the sanctions issued by the Treasury’s Office of Foreign Assets Control (OFAC) are “unprecedented and unlawful.” They state, “OFAC’s sanctions are unlawful. OFAC lacks statutory authority to sanction software like Tornado Cash, and regardless, its decision lacks any factual predicate that could render the sanctions lawful.”

Tornado Cash: Software Beyond Sanctioning

The associations emphasize that Tornado Cash is software and, although OFAC has the legal power to sanction individuals or property, it cannot impose sanctions on a decentralized protocol. They assert that the core Tornado Cash software is not owned by anyone and, therefore, OFAC’s creation of a fictional “person” as a basis for sanctioning the crypto mixer is unfounded.

The joint brief acknowledges that Tornado Cash has been used maliciously for money laundering, particularly by North Korean-affiliated hackers. However, it also highlights the protocol’s legitimate uses, such as enhancing privacy on the Ethereum blockchain, which is publicly viewable.

Seeking Legal Relief and Prohibition

The advocacy groups contend that the sanctions against Tornado Cash should be declared unlawful, and they urge the courts to prohibit their enforcement. This joint amicus brief follows a similar filing made by the two organizations in April, supporting a lawsuit brought by six individuals against the Treasury Department concerning its sanctions on Tornado Cash.

The aforementioned lawsuit, initiated in September and supported by crypto exchange Coinbase, aims to remove the ban on the crypto mixer. However, the Treasury Department asserts that such crypto mixers pose a national security threat and claims that Tornado Cash has repeatedly failed to implement controls to prevent money laundering.