Coin Center Sues Treasury Over Tornado Cash Sanctioning

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  • Coin Center has sued the U.S. Treasury over its sanctioning of Tornado Cash
  • The crypto advocates claim that Americans’ right to privacy has been impacted
  • The group wants the mixing service taken off the sanctions list and the prevention of further such action

Coin Center has carried through with its threat to sue the U.S. Treasury over the sanctioning of mixing service Tornado Cash. The Treasury Department’s Office of Foreign Assets Control (OFAC) added Tornado Cash and 44 Ethereum addresses linked to it to the Specially Designated Nationals And Blocked Persons (SDN) List at the start of August, to which many reacted negatively, calling it a breach of privacy, and Coin Center threatened legal action over it. This has now come to pass, with the crypto advocates calling the move “unprecedented and unlawful”.

Treasury “Overstepped its Legal Authority”

Coin Center Executive Director Jerry Brito and Research Director Peter van Valkenburgh claimed in the wake of the sanctioning in August that OFAC “overstepped its legal authority” when it sanctioned Tornado Cash, arguing that the entity that was censored, what it calls the ‘Tornado Cash Entity’, is no longer in control of the code. The code is out there in the public domain and no one owns it, so who is there to sanction? Who would pay the fine if one was ever levied?

This, among other arguments, was why Coin Center said it was “exploring with counsel a court challenge to this action”, action it has now taken. In a filing made yesterday, Coin Center argued that Tornado Cash “helps Americans maintain their privacy while using cryptocurrency and related assets”, arguing that U.S. citizens use Tornado Cash to protect their transactions from being publicised, which is their right under “the Constitution and half a millennium of Anglo-Saxon common-law norms.”

Coin Center Demands Vacation of Decision

The lawsuit asks the court to provide “A declaration that the criminalization of Tornado Cash is null, void, and with no force or effect” and asks the court to vacate the Treasury’s sanctioning of Tornado Cash. No doubt the Treasury will point to the use of Tornado Cash by illicit actors, which Coin Center cannot deny, but whether this is enough to breach constitutional rights is the battle that lies ahead.