Federal Court Overturns Sanctions on Tornado Cash

A federal appeals court has ruled that the U.S. Treasury Department overstepped its authority by sanctioning Tornado Cash, a cryptocurrency mixer used to anonymize transactions linked to illicit activities. The 5th Circuit Court of Appeals determined that the immutable smart contracts behind Tornado Cash do not qualify as property under the International Emergency Economic Powers Act (IEEPA), thereby invalidating the sanctions imposed in 2022. This ruling has been hailed as a significant victory for advocates of decentralized technology and privacy, reigniting discussions on the regulation of blockchain tools. Coinbase's Chief Legal Officer, Paul Grewal, celebrated the decision as a historic win for crypto innovation and personal liberty. Following the ruling, Tornado Cash's token saw a surge of over 500%. Nonetheless, the controversy surrounding Tornado Cash continues, as one of its developers faces separate legal challenges.