The crypto industry advocacy groups, the Blockchain Association and the DeFi Education Fund, have expressed their support for Coin Center’s lawsuit against the U.S. Treasury over sanctions on Tornado Cash. They argued that the sanctions are unprecedented and illegal, as a decentralized protocol like Tornado Cash cannot be sanctioned by the Office of Foreign Assets Control (OFAC).
In the previous year, the United States Treasury imposed sanctions on Tornado Cash, an Ethereum coin mixer, alleging its involvement in money laundering. However, this action ignited a heated debate in the cryptocurrency community, prompting Congressman Tom Emmer to express concerns about the Treasury Department’s actions. In a letter to Treasury Secretary Janet Yellen, Congressman Emmer inquired about the restrictions placed on Tornado Cash, a service that blends Ethereum coins.
Emmer also stated that the application of sanctions on a neutral, open-source, decentralized technology gives rise to a range of new inquiries. Furthermore, it affects national security and jeopardizes the privacy of all American citizens. Notably, an impressive sum of $7 billion has been transferred through Tornado Cash.
According to the associations, Tornado Cash is a software that cannot be owned by any individual or entity. While OFAC possesses the legal power to impose sanctions on people or property, it lacks the authority to sanction a decentralized protocol. They contended that OFAC created a fictional “person” to justify sanctioning the crypto mixer, suggesting that it was a baseless action.
The brief acknowledged that the protocol had been exploited for money laundering, particularly by hackers linked to North Korea. However, it also highlighted the legitimate use of the protocol to enhance privacy on the transparent Ethereum blockchain.
The groups contended that the sanctions should be deemed illegal, and the courts should prohibit their enforcement. The Treasury also asserted that crypto mixers like Tornado Cash pose a risk to national security, emphasizing that Tornado Cash had consistently failed to establish measures to prevent money laundering.