The court ruling against OFAC has significantly impacted the US crypto industry, potentially leading to policy changes regarding addresses associated with crypto mixers.
Court Ruling Against OFAC
On November 26, the US Court of Appeals for the Fifth Circuit ruled that the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) exceeded its authority when it sanctioned some of Tornado Cash's immutable smart contracts in 2022.
Bill Hughes' Statement
According to Bill Hughes, Consensys' senior counsel and director of global regulatory matters, OFAC still has a lot of authority to sanction entities connected to Tornado Cash. The case will likely move to lower courts for further examination.
Future Crypto Regulation
With Donald Trump's new administration expected in 2025, the Treasury may adapt its sanctions regime to align with the court decision or continue its appeal. However, changes to Tornado Cash’s sanction status before Trump takes office are considered unlikely.
The court decision marks a significant step in reconsidering regulatory approaches to cryptocurrency technologies. It remains to be seen how things will develop with the new administration.
