U.S. Court Blocks OFAC Sanctions on Tornado Cash: Huge Win for Crypto Privacy!

The U.S. federal court has permanently barred the Office of Foreign Assets Control (OFAC) from reimposing sanctions on Tornado Cash, a crypto mixing service. The ruling, issued on April 28 by Austin federal court judge Robert Pitman, could set a significant precedent in determining whether open-source crypto protocols can be held liable for how their tools are used.

Understanding Tornado Cash vs. OFAC

The legal conflict began in August 2022, when the U.S. Treasury sanctioned Tornado Cash, accusing the platform of helping North Korean hacker group Lazarus launder stolen crypto. Tornado Cash argued that its developers should not be held accountable for how others use their open-source code.

The court’s ruling agrees with that stance, setting a significant precedent for the broader crypto industry.

Although OFAC removed Tornado Cash from its sanctions list in March 2023, the platform continued to fight in court to clear its name and challenge what it saw as excessive government control. Initially, a lower court sided with the U.S. Treasury, but that decision was overturned by the Fifth Circuit Court.

This shift set the stage for Judge Pitman’s final ruling, which now prevents OFAC from imposing sanctions on Tornado Cash as a protocol.

A Win for Developers and Privacy Tools

Judge Pitman’s ruling is a big win for Tornado Cash and the larger open-source crypto community. The decision reinforces the idea that developers should not be held responsible for how their code is used by others. This ruling has important implications for privacy-focused tools in the crypto space, which are facing increasing regulatory pressure globally.

Roman Storm’s Ongoing Legal Battle

Despite this victory in court, Tornado Cash’s co-founder Roman Storm still faces serious legal challenges. In August 2023, he was charged with laundering over $1 billion through the platform. His next hearing is scheduled for July 2025, meaning the legal battle for Tornado Cash is far from over.

DeFi Education Fund Calls for Innovation Protection

On the same day as the court’s ruling, the DeFi Education Fund called on the White House to drop the charges against Roman Storm. The fund expressed concern that holding developers responsible for the misuse of their code could hinder innovation in the U.S. crypto space.

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