Texas Court Declares U.S. Treasury Sanctions on Tornado Cash Unlawful

# U.S. Federal Court Rules Treasury Department’s Sanction on Tornado Cash Illegal A federal court in Texas has determined that the U.S. Department of the Treasury's sanctions against Tornado Cash, a cryptocurrency mixer service, are unlawful. This ruling effectively prevents the Treasury from reinstating sanctions or blacklisting the service again. Reports from local media on the 30th (local time) reveal that Judge Robert Pitman of the U.S. District Court for the Western District of Texas issued the decision on the 28th, stating that the Office of Foreign Assets Control (OFAC) within the Treasury Department acted illegally when sanctioning Tornado Cash. The judge also declared that the sanction could not be enforced in perpetuity. In November of the previous year, Joseph Van Loon and others filed a lawsuit claiming that OFAC's decision to include Tornado Cash’s smart contract addresses on the Specially Designated Nationals and Blocked Persons (SDN) list was illegal. OFAC had sanctioned Tornado Cash in August 2022, alleging that the platform facilitated money laundering for the North Korea-affiliated hacking group Lazarus Group. In its latest ruling, the court barred OFAC from reapplying sanctions against Tornado Cash or re-adding it to the sanctions list. Initially, a lower court had ruled in favor of the Treasury Department, but the U.S. Fifth Circuit Court of Appeals overturned that decision, delivering a partial victory to the plaintiffs. On the same day, the nonprofit organization DeFi Education Fund urged David Saks, White House advisor on digital asset policy, to dismiss criminal charges against Roman Storm, co-founder of Tornado Cash. Storm was indicted in August 2023 on charges of laundering over $1 billion in digital assets. His trial is set for July. This ruling represents a significant development in the ongoing debate over government regulation of decentralized technologies and the limits of financial sanctions.