Tornado Cash is officially safe from US sanctions, after a ruling from the district court on Monday.
The Office of Foreign Assets Control (OFAC) of the Treasury Department eliminated Tornado’s cash from its sanctions list in March, several months after a Court of Appeals ruled that the agency had “survived its authority defined by Congress” by sanctioning the intelligent contracts of the Crypto mixing service in 2022.
However, the way in which the OFAC baffled the tornado cash, and the subsequent notices and motions that their lawyers presented to the court in March, left apparent margin of maneuver so that the agency would put the mixing service again in its air exclusion list in the future, said a federal judge. Treasury lawyers argued that, due to Ofac, he had revoked sanctions against Tornado’s cash before the final judgment of the District Court (but after the decisive decisive of the Court of Appeals), the issue was debatable.
But, to the six plaintiffs in Van Loon vs. Treasure – All Cash Tornado users – The problem was not, in fact, debatable. In a presentation of April 21, their lawyers eliminated the response of Ofac to the fifth circuit ruling, calling it “a study in chaos” and accusing them of “Wav[ing] The flag of the discussion “in a last effort to” evade an adverse judgment. “
“Enough is enough,” said the lawyer’s lawyers to the judge. “It’s time for this court to do what the fifth circuit ordered months ago … The designation of the defendants must be illegal and reserved.”
In his ruling yesterday, the United States District Judge, Robert Pitman, from the West District of Texas, said that the case was not debatable and that he put on the side of the plaintiffs, ruling that the designation of of Tornado cash was illegal and, therefore, the agency is permanently responsible for imposing sanctions against him.
“[OFAC does] They will not suggest that they will not punish the tornado cash, and they can try to recreate precisely the same [designation] In the future, “Pitman wrote.” Instead of recognizing that the order of the fifth circuit required that eliminating the tornado cash, the defendants claim that they exercised their “discretion” by deciding to do so based on more general policies and legal considerations. “
The United States Department of Justice (DOJ) is chasing criminal charges against two tornado cash developers, Roman Storm and Roman Semenov, who were accused in 2023 of conspiracy to commit money laundering, conspiracy to operate a transmitter of money without license and conspiracy to violate the sanctions of the United States. Semenov remains on the list of sanctions of Ofac.
Earlier this month, the United States attached attorney general, Todd Blanche, sent the DOJ personnel a memorandum that informed them about the execution priorities related to cryptography. The staff received instructions not to pursue cases against cryptography exchanges, mixing services or wallets offline “for the acts of their end users or involuntary violations of regulations.” Blanche ordered any ongoing investigation that did not meet these new priorities to be withdrawn, and said that his office would work with the criminal division of the Department of Justice to decide how to proceed with any ongoing litigation that did not comply with the new application standards.
The memorandum has already made waves in ongoing cryptographic litigation. The prosecutors in the case against the two founders of Crypto Mixer Samourai Wallet submitted a joint application before the defense lawyers on Monday, asking the Court for an extension of 16 days in several deadlines, since they decided or not withdraw or not charges under the auspices of the Blanche note.
A large number of prominent figures in the cryptographic industry also signed a letter from the Education Fund Defi to the AI of the White House and Crypto Tsar David Sacks on Monday, urging the president of the United States, Donald Trump, to intervene in the case to “suspend the campaign without the right of the Department of Justice of the Age of the Era Era to criminalize the development of software of open origin” and the prosecution storm.
Read more: Samourai wallet prosecutors are considering abandoning charges under the new compliance priorities of the Justice Department: Presentation
