The crypto industry is discussing the U.S. Court of Appeals decision that questioned OFAC's authority to sanction Tornado Cash smart contracts on November 26. These contracts were targeted in 2022 for allegedly laundering over $7 billion in crypto.
Court Decision and Its Implications
The decision emerged from a case backed by Coinbase and six plaintiffs. While it doesn't absolve Tornado Cash altogether, it opens the door for potential policy shifts starting in 2025. Legal experts believe the case will return to lower courts for further proceedings.
Role of Trump Administration
The incoming administration of President-elect Donald Trump may be pivotal in determining Tornado Cash’s fate. According to Bill Hughes, senior counsel at ConsenSys, the Trump administration might align with the court’s analysis, potentially softening the sanctions. Trump's unpredictable stance on national security related to crypto leaves the direction of policy changes open.
Legal Battles Over Tornado Cash
Meanwhile, legal proceedings involving Tornado Cash continue globally. Crypto advocacy group Coin Center has filed its own lawsuit against the Treasury, arguing that smart contracts lack 'property' characteristics and shouldn't be subject to sanctions. Tornado Cash co-founders also face charges: Roman Storm is set to stand trial in April 2025, while Roman Semenov remains on the FBI’s most-wanted list.
The court ruling opens new avenues for reconsidering sanctions on smart contracts, impacting future policy directions under the new administration. However, legal battles continue to complicate the situation around Tornado Cash.
