The US Treasury Department is seeking to dismiss the lawsuit against Tornado Cash, arguing that it is moot following the removal from its sanctions list.
US Treasury's Arguments
In August 2022, OFAC flagged Tornado Cash for allegedly aiding North Korea’s Lazarus Group in laundering stolen crypto. In March 2024, a court ruled to delist Tornado Cash, and now the agency claims there is no longer a legal dispute.
Counterarguments from Coinbase
Paul Grewal, Coinbase’s Chief Legal Officer, disagrees with the mootness claim, arguing that removal from the list doesn’t ensure a final court judgment. He cited the 2024 Supreme Court case of Yonas Fikre, wrongly placed on the No Fly List, as an example that delisting doesn't make lawsuits irrelevant.
Current Situation with Tornado Cash
Despite being delisted, Tornado Cash founders still face legal challenges. The US Department of Justice charged Roman Storm and Roman Semenov with laundering over $1 billion through the protocol. Storm is out on $2 million bail pending trial, while Semenov is on the FBI’s wanted list. Developer Alexey Pertsev was recently released on house arrest pending an appeal.
The removal of Tornado Cash from the sanctions list has not resolved all legal issues related to the protocol, as proceedings continue.
