TL;DR Breakdown
- The Blockchain Association and the DeFi Education Fund have joined forces to express their support for Coin Center’s lawsuit against the U.S. Treasury regarding the imposed sanctions on Tornado Cash.
- According to the associations, OFAC lacks the statutory authority to sanction software like Tornado Cash.
- The Treasury has argued that crypto mixers like Tornado Cash pose a national security threat and have failed to implement adequate measures to prevent money laundering.
The Blockchain Association and the DeFi Education Fund have joined forces to express their support for Coin Center’s lawsuit against the U.S. Treasury regarding the imposed sanctions on Tornado Cash. The two cryptocurrency industry advocacy groups filed a joint amicus brief, arguing that the sanctions imposed by the Treasury’s Office of Foreign Assets Control (OFAC) are both unprecedented and unlawful.
According to the associations, OFAC lacks the statutory authority to sanction software like Tornado Cash. They contend that Tornado Cash is a decentralized protocol and cannot be owned by anyone. While acknowledging that there have been instances of malicious use of the protocol for money laundering, including by North Korean-affiliated hackers, the groups highlighted the legitimate use cases of Tornado Cash, such as enhancing privacy on the Ethereum blockchain.
“OFAC’s sanctions are unlawful. OFAC lacks statutory authority to sanction software like Tornado Cash, and regardless, its decision lacks any factual predicate that could render the sanctions lawful.”
U.S. vs Tornado Cash
The associations called for the sanctions to be declared unlawful, urging the courts to prohibit their enforcement. This is not the first time these groups have voiced their support for such a cause. In April, they filed a similar amicus brief in support of a lawsuit brought by six individuals against the Treasury Department over the sanctions on Tornado Cash. Coinbase, the crypto exchange, is also backing the lawsuit with the aim of lifting the ban on the crypto mixer.
The U.S. Treasury has argued that crypto mixers like Tornado Cash pose a national security threat and have failed to implement adequate measures to prevent money laundering. However, the industry advocacy groups maintain that the sanctions should be dropped and that OFAC’s actions are without legal basis.
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