The US Treasury Department’s Office of Foreign Assets Control (OFAC) cannot impose sanctions on the crypto mixer, Tornado Cash, after, the US federal court’s verdict. Judge Robert Pitman at the district court of Austin, Texas, “having considered the parties’ briefs and the relevant law, stated, “the Court finds that Plaintiffs’ motion should be granted.”
Plaintiffs, led by Joseph Van Loon and some Tornado Cash users, sued the Treasury, seeking an order as “declaring Defendants’ designation not in accordance with law and in excess of statutory jurisdiction, authority, or limitations within the meaning of 5 U.S.C. § 706(2), and sought relief including vacating and setting aside the designation.”
The battle started when the treasury sanctioned the crypto mixer in Aug 2022, stating that it helped North Korean hackers, the Lazarus Group, launder money. However, after several appeals, in March 2024, the treasury removed the mixer from the black list. The treasury did not admit that they were forced by the court to delist, but stated that they did it as part of their policy. Nonetheless, the plaintiffs argued that the OFAC delisted and backed down at the last minute to avoid an official judgment from the court.
The way that OFAC de-listed Tornado Cash, and the way its lawyers filed subsequent notices and motions with the court in March, left apparent room for the agency to once again put the mixer back on the black list, stated to the judge. But the OFAC lawyers argued that the case was moot because OFAC revoked the sanctions before the final judgment. But to Loon and the users of Tornado Cash, the issue was not, in fact, moot.
The judge sided with the plaintiffs and adjudicated, the case was not moot, and declared that OFAC’s sanctions were illegal and therefore permanently enjoined OFAC from enforcing sanctions against Cash unless it acquires a new legal basis.
