Source: Cointelegraph
Original: “U.S. Treasury's OFAC Request to Restore Tornado Cash Sanctions Rejected by Judge”

A U.S. federal court ruled that OFAC cannot restore or reimpose sanctions on the cryptocurrency mixing service Tornado Cash.

Austin federal judge Robert Pitman determined in a ruling on April 28 that OFAC's sanctions against Tornado Cash were unlawful and "permanently prohibited" the agency from enforcing related sanctions.

The case was brought by Tornado Cash users, including Joseph Van Loon, who claimed that OFAC's action of listing the platform's smart contract address on the "Specially Designated Nationals and Blocked Persons" (SDN) list was "not in accordance with the law."

OFAC sanctioned Tornado Cash in August 2022, accusing the protocol of assisting the North Korean hacking group "Lazarus Group" in laundering stolen cryptocurrency. On March 21 of this year, OFAC removed Tornado Cash from the sanctions list, arguing that the matter had become "meaningless" after a favorable court ruling in January.

The latest amended ruling prohibits OFAC from re-sanctioning Tornado Cash or placing it back on the blacklist. Notably, the court initially rejected some of the plaintiffs' motions for summary judgment and supported the Treasury's position, but the Fifth Circuit Court of Appeals overturned the original ruling, directing the lower court to support the plaintiffs' claims, ultimately leading to the sanctions being lifted. In March of this year, the Treasury also argued that the case did not require a final court ruling.

Cryptocurrency Organizations Petition the White House Regarding Tornado Cash Case

On April 28, the DeFi Education Fund submitted a petition to David Sacks, the White House cryptocurrency affairs director, requesting the prosecution to drop charges against Tornado Cash co-founder Roman Storm.

Storm was charged in August 2023 with assisting in the laundering of over $1 billion in cryptocurrency through the protocol, with his trial still scheduled for July of this year.

The organization pointed out in the petition that the Justice Department's attempt to hold software developers criminally liable for how others use code is "not only absurd in principle but could also stifle all cryptocurrency development activities in the U.S., setting a dangerous precedent."

Related: The U.S. Securities and Exchange Commission (SEC) Delays Approval of XRP and Dogecoin ETF Applications

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