Coin Center Sues US Treasury For Tornado Cash Sanction

Non-profit research and advocacy center Coin Center has sued the United States Treasury Department and its Office of Foreign Asset Control (OFAC) over its sanction on the crypto mixing platform Tornado Cash.

According to the think tank, the sanction which the watchdog levied on Tornado Cash harmed Americans and has affected their ability to transact privately using the Ethereum (ETH) network.

Apart from the fact that hackers use crypto mixers or tumblers to obfuscate the origin of the funds, other non-criminal players make use of such tool for legitimate transactions which they intend to keep anonymous. With Tornado Cash under sanction, customers have effectively exposed their entire transaction history to anyone looking at the network data.

Immediately the U.S Treasury Department sanctioned Tornado Cash and 44 ETH wallet and USDC wallets connected to the mixer in August for its involvement in laundering about $7 billion since its inception, Coin Center promised to sue the watchdog. In its argument, Coin Center called the decision of the U.S authorities to sanction Tornado Cash ‘unconstitutional’. 

Smart contracts cannot be sanctioned as this will set wrong and dangerous standards for coders globally, the advocacy group said.

U.S Treasury Department OFAC Faces Crypto Community Fury

Coin Center believes that OFAC unlawfully used its authority to alienate Tornado Cash from its users. Jerry Brito, an executive director, and Peter Van Valkenburgh, director of research both at Coin Center agreed that “by treating autonomous code as a ‘person’ OFAC exceeds its statutory authority.”

In defense, OFAC responded and justified the sanction by saying that Tornado cash has been used by several bad actors including the North Korea Hacker group Lazarus, to launder proceeds from their illicit activities. The crypto community refused to agree with OFAC, instead, they have accused the watchdog of going against crypto’s holiest tenet which is user privacy.

Brito reiterated through a tweet “Not only are we fighting for privacy rights, but if this precedent is allowed to stand, OFAC could add entire protocols like Bitcoin or Ethereum to the sanctions list in [the] future, thus immediately banning them without any public process whatsoever.”

Similarly, a sect of investors and crypto engineers joined forces to press charges against the U.S Department of Treasury in September still in respect of the Tornado Cash sanction.