The US Treasury has decided to withdraw its appeal against Tornado Cash, officially closing the legal dispute over sanctions imposed on the crypto tool. This decision has significant implications for all parties involved.
Closure of Sanctions Case
The US Treasury filed a request with the Eleventh Circuit Court of Appeals, which then tossed the judgment and instructed the lower court to dismiss the case. This ruling implies that the government's guidance on enforcing those sanctions is now void. This decision came after a joint resolution between Coin Center and the Treasury.
Ongoing Criminal Proceedings
While the civil battle over sanctions has concluded, criminal charges against developer Storm are still moving forward, with his trial set to begin on July 14. He faces accusations of laundering over $1 billion, allegedly linked to the North Korean hacking group Lazarus. These charges are far more severe than those presented in the civil case.
Context and Implications for Developers
Storm, supported by firms like Coinbase and the Ethereum Foundation, argues that the government is targeting software code rather than actions. This defense is becoming increasingly persuasive in judicial settings. In a related event, another Tornado Cash developer, Alexey Pertsev, was convicted in the Netherlands for money laundering and sentenced to five years in prison.
The decision to drop the case against Tornado Cash marks a significant shift in legal practice regarding crypto tools and their regulation. It also highlights the growing complexity and severity of charges against developers of crypto instruments.
