U.S. Court Rules Against Treasury in Tornado Cash Sanctions Case
Background of the Case
The controversy began when the Treasury’s Office of Foreign Assets Control (OFAC) placed Tornado Cash and its associated addresses on the Specially Designated Nationals (SDN) list in August 2022. The sanctions were imposed citing the platform’s alleged involvement in laundering approximately $455 million, which was purportedly linked to the North Korean hacker group, Lazarus Group.
Tornado Cash, known for its role in the Ethereum blockchain, allows users to enhance their transaction privacy by pooling funds to obscure the details of individual transactions. While it is designed to protect user privacy, it has also been criticized for facilitating illicit activities by malicious actors.
Details of the Ruling
Following the court’s decision, the native token of Tornado Cash, TORN, experienced a significant surge in its value, climbing to nearly $23.32, which marks an increase of over 200% by Wednesday morning, as per data from CoinGecko.
Implications of the Ruling
This ruling is particularly noteworthy as it represents the second time the Treasury has faced defeat in its attempts to regulate similar technologies. Previously, in November, the U.S. Fifth Circuit Court also ruled that the Treasury had exceeded its authority with similar sanctions on immutable smart contracts.
Continued Legal Challenges
This case is a critical juncture for the crypto industry, as it navigates the fine line between innovation and regulation. For more insights into how blockchain technology is reshaping the legal landscape, visit our detailed analysis on Blockchain Democracy in the UK and explore the broader implications of these technologies in various sectors.
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