The Chief Legal Officer of Coinbase, Paul Grewal mentioned the ruling as a significant win for privacy advocates.
Apart from illegal activities, many users use Crypto mixers to safeguard their financial privacy and security.
On the other hand, there were some major cases involving these Crypto mixers which shook the Crypto space at its time.
An appeals court of the United States has ordered that the Treasury Department’s Office of Foreign Asset Control (OFAC) outstripped its authority by authorizing immutable smart contracts of Tornado Cash.
After this decision, the citizens of the United States have been permitted to restart their use of the protocol and have reversed the actions taken by OFAC in the past. It has also removed Tornado Cash smart contracts from the sanctions list.
On November 26, the Fifth Circuit Court of Appeals passed a judgment over the legality of sanctions forced on Tornado Cash by OFAC. In the review of the case, the court found that the sanctions were illegal and could not be owned by any specific body or person.
A significant win for privacy advocates
The three-judge panel of the appeals court went on to say in its decision, “We hold that the immutable smart contracts of Tornado Cash is not a property of a foreign national or specific body.”
The court further elaborated that under the International Emergency Economic Powers Act (IEEPA), OFAC can only sanction property possessed by foreign persons, which is not applicable to autonomous smart contracts. Following this, the court ordered a Texas district court to permit a motion for partial summary judgment filed by the plaintiffs, headed by Joseph Van Loon, summoning the sanctions.
To this matter, the Chief Legal Officer of Coinbase, Paul Grewal mentioned the ruling as a significant win for privacy advocates and the wider crypto industry. He has also mentioned that at the time the government is working on preventing illegal activities, banning open-source technology based on its exploitation by some users goes beyond the scope of authority of the Treasury.
The image of crypto mixers, often referred to as tumblers like Tornado Cash has been defamed by bad actors who have misused the services for illegal activities. These illegal activities mainly include money laundering, illegal transactions, scams, phishing, and so on. The media has also played a big role in portraying these crypto mixers negatively and has always thrown light on illegal activities involved with them rather than showing their actual use.
Apart from illegal activities, many users use Crypto mixers to safeguard their financial privacy and security. In the recent past, more transparent and compliant Cryptomixers have been used to keep user safety and security its top priority.
On the other hand, there were some major cases involving these Crypto mixers which shook the Crypto space at its time. One of these cases was the Ronin Bridge Hack of 2022. In this hack, the scammers robbed $615 worth of Crypto from a prominent crypto platform, Ronin Bridge. Further, the investigation showed that the scammers used Tornado Cash to launder the stolen funds.