{"id":3405,"date":"2024-11-27T23:01:50","date_gmt":"2024-11-27T23:01:50","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=3405"},"modified":"2024-11-27T23:01:50","modified_gmt":"2024-11-27T23:01:50","slug":"tornado-cash-scores-stunning-victory-for-crypto-against-us-treasury-department","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=3405","title":{"rendered":"Tornado Cash Scores \u2018Stunning Victory\u2019 For Crypto Against US Treasury Department"},"content":{"rendered":"
\n

aOn November 26, the Fifth Circuit Court of Appeals ruled that the US Department of the Treasury\u2019s Office of Foreign Assets Control (OFAC) exceeded its authority by sanctioning crypto mixer Tornado Cash\u2019s immutable smart contracts. The court declared that these autonomous smart contracts, which operate without human intervention, cannot be classified as \u201cproperty\u201d under federal law, effectively placing them outside the scope of the International Emergency Economic Powers Act (IEEPA).<\/p>\n

Crypto Wins Big Time<\/h2>\n

The ruling<\/a> overturns OFAC\u2019s prior designation of Tornado Cash\u2019s smart contracts on the sanctions list\u2014a move that had significant implications for privacy and decentralization<\/a> within the crypto industry. The judges emphasized that immutable smart contracts are lines of code not subject to ownership or control, and thus cannot be sanctioned as property.<\/p>\n

Tornado Cash is an open-source, decentralized protocol that enables users to enhance the privacy of their crypto transactions on the Ethereum blockchain. By pooling transactions and obscuring the trail of funds, it offers a layer of anonymity.<\/p>\n

In August 2022, OFAC sanctioned<\/a> Tornado Cash, alleging that it was used to launder more than $7 billion worth of cryptocurrency since its creation in 2019, including funds linked to North Korean hackers. The sanctions marked the first time the US government targeted a decentralized protocol rather than specific individuals or entities..<\/p>\n

The Fifth Circuit\u2019s decision centers on the interpretation of \u201cproperty\u201d under the IEEPA. The court concluded that immutable smart contracts\u2014self-executing code that runs autonomously on a blockchain\u2014do not constitute property because they are not capable of being owned or controlled by any individual or entity. This distinction is crucial, as the IEEPA grants the Treasury the authority to regulate or prohibit transactions involving foreign property interests but does not extend to autonomous code without ownership.<\/p>\n

The court stated, \u201cImmutable smart contracts are autonomous and self-executing pieces of code that function without human intervention. They do not possess the attributes of property as traditionally understood under federal law.\u201d<\/p>\n

Crypto Industry Reactions<\/h2>\n

Paul Grewal, whose company Coinbase supported the legal challenge against the Treasury, hailed<\/a> the decision as a historic win for the crypto community. Writing on X (formerly Twitter), he stated: \u201cPrivacy wins. Today, the Fifth Circuit held that the US Treasury\u2019s sanctions against Tornado Cash smart contracts are unlawful. This is a historic win for crypto and all who care about defending liberty. Coinbase is proud to have helped lead this important challenge.\u201d<\/p>\n

The Coinbase CLO emphasized the court\u2019s recognition that \u201cblocking open-source technology entirely because a small portion of users are bad actors is not what Congress authorized.\u201d He added that the sanctions \u201cstretched Treasury\u2019s authority beyond recognition,\u201d and the court\u2019s decision corrects this overreach.<\/p>\n

Variant Fund CLO Jake Chervinsky described<\/a> the ruling as a \u201cstunning victory for crypto.\u201d He added: \u201cThe court held that immutable smart contract protocols are not \u201cproperty\u201d subject to sanctions \u201cbecause they are not capable of being owned\u201d and struck down OFAC\u2019s 2022 designation of Tornado Cash. Decentralization wins.\u201d<\/p>\n

Matt Corva, a lawyer with Ethereum development firm ConsenSys, underscored<\/a> the significance of the decision as a check on administrative overreach. He remarked: \u201cThe Fifth Circuit Court of Appeals ruling in favor of plaintiffs challenging the prior addition of Tornado Cash smart contracts to the sanctions list pursuant to IEEPA is tremendous. Incredible win here. Another blow to the administrative state acting without updated and direct congressional authority.\u201d<\/p>\n

Corva also pointed out the disproportionate burden placed on those affected by such government actions: \u201cThere is huge cost to those impacted in trying to make that right. This outcome wouldn\u2019t have been possible without Coin Center, Coinbase\u2019s Paul Grewal, and the many minds and wallets who contributed to this and similar challenges around the country in other cases.\u201d<\/p>\n

Uniswap Labs CEO Hayden Adams expressed<\/a> astonishment at the court\u2019s decision: \u201cHoly shit. Immutable smart contracts just beat the treasury department in court. [\u2026] Incredible the degree to which crypto is killing it in federal courts.\u201d<\/p>\n

As of now, the Treasury Department has not announced whether it will appeal the Fifth Circuit\u2019s decision. The case could potentially be escalated to the Supreme Court<\/a> if the government seeks to challenge the ruling further.<\/p>\n

At press time, the Tornado Cash token (TORN) traded at $18.08, up 415% in the last 24 hours.<\/p>\n

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

aOn November 26, the Fifth Circuit Court of Appeals ruled that the US Department of the Treasury\u2019s Office of Foreign Assets Control (OFAC) exceeded its authority by sanctioning crypto mixer Tornado Cash\u2019s immutable smart contracts. The court declared that these autonomous smart contracts, which operate without human intervention, cannot be classified as \u201cproperty\u201d under federal […]<\/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-3405","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\/3405","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=3405"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/3405\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}