US court lifts sanctions on mixer Tornado Cash by Treasury Department, founder Vitalik expected to be released

According to a court document dated January 21st, the U.S. Western District Court of Texas has lifted OFAC's sanctions on the mixer Tornado Cash. Inspired by this, Tornado Cash Token TORN also saw a big pump, with a surge of up to 168% in the past 24 hours. (Background: U.S. Court: Treasury Department 'overreached' in sanctioning Tornado Cash, Smart Contract not considered property, will the founder's Money Laundering charges be dropped?) (Context: Tornado Cash faces a maximum sentence of 45 years in the U.S., is programming considered Money Laundering?) The popular mixer protocol Tornado Cash was suspected of being used by North Korean hackers for Money Laundering exceeding 1 billion USD and was placed on the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) sanctions list in August 2022, prohibiting Americans from using the protocol. Additionally, Tornado Cash co-founders and developers Alexey Pertsev, Roman Storm, and Roman Semenov were also charged with Money Laundering. U.S. court lifts OFAC sanctions. However, according to a recent court document, the U.S. Western District Court of Texas has lifted the sanctions on Tornado Cash, with the court ruling to: uphold the district court's judgment and remand the case for further proceedings. The U.S. court ruled that OFAC overreached. This outcome is not surprising as in late November last year, a panel of three judges from the U.S. Fifth Circuit Court of Appeals ruled that OFAC overreached in sanctioning Tornado Cash's immutable Smart Contract (code providing privacy features) because they are not considered 'property' of foreign individuals or entities. In other words: 1) These contracts cannot be frozen under the International Emergency Economic Powers Act (IEEPA); 2) OFAC exceeded the scope of authority granted by Congress. (Note: IEEPA is a U.S. federal law enacted in 1977, granting the President authority to regulate and prohibit certain financial transactions.) Bill Hughes, Consensys' General Counsel, also pointed out the core reasons for the court ruling that OFAC overreached, including: Immutable Smart Contracts are not property, Sanctions cannot stop the contract from functioning, and Innocent users may be affected. Many cryptocurrency industry insiders have previously stated that Tornado Cash is a neutral tool, and the real issue lies with those who use it for criminal activities. They believe that responsibility should be placed on those who misuse the platform for illegal activities, rather than on the platform itself or its developers. TORN surged by 168%. The U.S. court lifting OFAC sanctions on Tornado Cash undoubtedly sends a signal of Favourable Information for the protocol. Inspired by this, Tornado Cash's native token TORN saw a big pump, with a surge of up to 168% in the past 24 hours, temporarily pulling back to $16.9 at the time of writing. Vitalik Buterin, founder of Ether, mentioned that Tornado Cash team members are expected to be released. With the U.S. signaling relatively friendly regulation towards mixers, the community is hopeful that the legal troubles faced by Tornado Cash's co-founders and developers, Alexey Pertsev, Roman Storm, and Roman Semenov, may be alleviated. In response, Vitalik Buterin expressed that with Ross Ulbricht, founder of the Darknet Silk Road, now being pardoned by Trump, and with Tornado Cash winning a significant legal victory, its co-founders Alexey Pertsev and Roman Storm may be the next to be released. Previously reported, Alexey Pertsev was convicted of Money Laundering in the Netherlands in May last year and sentenced to 64 months in prison; Roman Storm and Roman Semenov also face three charges in August 2023 for their involvement in the mixer's development. No man left behind. @rstormsf and @alex_pertsev next. Tornado Cash itself won an important case today: — vitalik.eth (@VitalikButerin) January 22, 2025 Related reports reveal the plot of the new King of Dogs 'NEIRO' rat trading: mixer sweeps 70% of Tokens, KOLs unanimously call for fear of missing out. The U.S. Treasury Department: Not aiming to shut down mixers, but hopes the industry seeks a path of 'privacy and Compliance' coexistence. Tornado mixer founder reiterates 'motion to dismiss lawsuit': 3 reasons questioning U.S. prosecution violation of procedures. (U.S. Court Lifts Treasury Department's Sanctions on Tornado Cash, Vitalik predicts founder's release) This article was first published on BlockTempo, the most influential blockchain news media.