{"id":18890,"date":"2025-03-25T03:32:02","date_gmt":"2025-03-25T03:32:02","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=18890"},"modified":"2025-03-25T03:32:02","modified_gmt":"2025-03-25T03:32:02","slug":"us-treasury-faces-backlash-over-attempt-to-dismiss-tornado-cash-case-without-final-ruling","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=18890","title":{"rendered":"US Treasury Faces Backlash Over Attempt To Dismiss Tornado Cash Case Without Final Ruling"},"content":{"rendered":"
\n

The US Department of the Treasury is facing backlash over its claim that a final court ruling on the Tornado Cash lawsuit is moot after delisting the crypto-mixing protocol from its sanctions list. Coinbase\u2019s Chief Legal Officer (CLO) argued that a final ruling is needed to prevent further attacks on the protocol.<\/p>\n

US Treasury Claims Tornado Cash Case Is Moot<\/h2>\n

The US Department of the Treasury\u2019s Office of Foreign Assets Control (OFAC) removed<\/a> Tornado Cash from its Specially Designated Nationals (SDN) list on March 21. It also delisted nearly 100 Smart Contract addresses affiliated with the Ethereum-based crypto mixer.<\/p>\n

The Friday delisting followed a November court ruling that determined the US Treasury had exceeded its authority by sanctioning the platform for allegedly \u201cfacilitating\u201d money laundering.<\/p>\n

The same day, the Treasury Department argued in a court filing that a final court judgment in the Tornado Cash lawsuit is required because the crypto mixer was removed from the SDN list.<\/p>\n

\"Tornado<\/p>\n

Coinbase\u2019s CLO, Paul Grewal, criticized the US treasury\u2019s \u201clate Friday pleading against Tornado Cash,\u201d noting that \u201cAfter grudgingly delisting TC, they now claim they\u2019ve mooted any need for a final court judgment. But that\u2019s not the law, and they know it.\u201d<\/p>\n

Grewal argued that \u201cunder the voluntary cessation exception, a defendant\u2019s decision to end a challenged practice moots a case only if the defendant can show that the practice cannot \u2018reasonably be expected to recur.\u2019\u201d<\/p>\n

He cited a case Supreme Court ruling from last year, FBI v. Fikre (2024), that determined the FBI didn\u2019t moot the case despite removing the plaintiff from the No Fly List because the ban could be reinstated again in the future.<\/p>\n

Based on this, the CLO considers a final court ruling on the Tornado Cash lawsuit necessary. He affirmed that the US Treasury has not assured that it won\u2019t relist<\/a> the crypto mixer in the future.<\/p>\n

\u201cThat\u2019s not good enough, and will make this clear to the district court,\u201d Grewal concluded. Notably, the Treasury Department stated that it remained \u201cdeeply concerned about the significant state-sponsored hacking and money laundering campaign\u201d of the Democratic People\u2019s Republic of Korea (DPRK), adding that it \u201cwill continue to monitor closely any transactions that may benefit malicious cyber actors or the DPRK.\u201d<\/p>\n

The Fight For Crypto Privacy<\/h2>\n

In August 2022, OFAC sanctioned Tornado Cash for \u201cfailing to impose effective controls\u201d to prevent malicious actors from laundering funds through the crypto mixer. The US Treasury alleged that the decentralized protocol had been used to launder over $7 billion worth of crypto since 2019, including $455 million linked to the North Korea-linked hacking group Lazarus.<\/p>\n

As Bitcoinist reported<\/a>, the US District Court for the Western District of Texas reversed the OFAC sanctions against Tornado Cash in January. However, Peter Van Valkenburgh, attorney and Executive Director at CoinCenter, pointed out that the court ruling wasn\u2019t \u201cthe end of the story.\u201d<\/p>\n

As he explained in January, the \u201cDistrict Court will still need to decide whether the remedy is nationwide vacatur (anyone in US can use immutable contracts) or more limited relief (plaintiffs can use contracts and other parties may need to bring their own suits). Nationwide vacatur is what we should be rooting for.\u201d<\/p>\n

On Sunday, Grewal also highlighted<\/a> that \u201cMoney laundering hurts people. There. So does violating the law set by Congress. And so does impugning the integrity of large numbers of software developers with broad slanders and no individualized evidence that they did anything illegal.\u201d<\/p>\n

It\u2019s worth noting that despite Tornado Cash\u2019s delist from OFAC\u2019s sanctions list, one of its founders, Roman Storm, and its developer, Alexey Pertsev, continue their legal battle against Money Laundering charges.<\/p>\n

Pertsev was detained in the Netherlands in August 2022 and convicted in May 2024. He is working on his upcoming appeal after receiving a supervised release from prison. Meanwhile, Storm, also detained in 2022, awaits<\/a> his April 14 trial.<\/p>\n

As Paradigm\u2019s co-founder, Matt Huang, previously pointed out, \u201cThe prosecution\u2019s case threatens to hold software developers criminally liable for the bad acts of third parties, which would have a chilling effect on crypto and beyond.\u201d<\/p>\n

\"tornado<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The US Department of the Treasury is facing backlash over its claim that a final court ruling on the Tornado Cash lawsuit is moot after delisting the crypto-mixing protocol from its sanctions list. Coinbase\u2019s Chief Legal Officer (CLO) argued that a final ruling is needed to prevent further attacks on the protocol. US Treasury Claims […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-18890","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/18890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18890"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/18890\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}