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A group of six crypto investors filed a lawsuit against the US Department of the Treasury demanding that sanctions be lifted from Tornado Cash
A group of six crypto investors backed by Coinbase have filed a lawsuit against the US Department of the Treasury for imposing sanctions on Tornado Cash, a decentralized protocol that allows users to anonymize their transactions on the Ethereum network. This was announced by General Counsel Paul Grewell.
The lawsuit alleges that the US Treasury violated the law and the Constitution by prohibiting US individuals and entities from interacting with Tornado Cash smart contracts. The plaintiffs allege that “this case is not about developing special rules for new technologies” but rather about requiring the Treasury to comply with the basic requirements of the International Emergency Economic Powers Act (IEEPA).
“The law says that sanctions can only block property. According to the legal definition, property is something that can be owned. But the open-source, immutable smart contracts that underpin this privacy software cannot be owned, controlled, or modified by anyone,” notes Gruell.
In addition, the lawyer argues that the government is trying to ban the use of open source software using property sanctions law. Since the law is not designed for this, they cannot make the law suitable for this case.
“Because the law is not designed for this, [правительство] cannot make the law suitable for this case,” says Grewell.
In April, Coinbase filed a new lawsuit seeking to lift sanctions against Tornado Cash. Behind the appeal were Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale and Nate Welch. They previously interacted with Tornado Cash.
Prior to this, the US Treasury faced a lawsuit from the non-profit organization Coin Center, which went to court because of sanctions against a cryptocurrency mixer. The organization pointed out that the restrictions imposed violate the constitutional rights of US citizens, since Americans use the mixer to protect their property.
In August 2022, the US Department of the Treasury’s Office of Foreign Assets Control imposed sanctions against Tornado Cash. The platform has helped launder more than $7 billion worth of assets since its launch in 2019, according to the regulator.
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