Tornado Cash Officially Safe From U.S. Sanctions

‘Moot’ Case

In 2022, the Treasury added Tornado Cash to the sanctions list, accusing it of facilitating the laundering of $7 billion in funds, including those linked to North Korea’s Lazarus group. However, after a lengthy legal battle, Tornado Cash was removed from the list last month.

Source: X (@iampaulgrewal)

The Treasury later argued that the case was “moot,” suggesting no further ruling was needed, which raised the possibility of Tornado Cash being re-added to the sanctions list.

Yesterday, the US District Court for the Western District of Texas dismissed this argument, stating that the Treasury might seek to “reenact precisely the same [designation]” in the future.

Unlawful Enforcement

Following a ruling against the government by the 5th Circuit in November, the Treasury had repeatedly sought to avoid a final judgment in the case. It requested multiple delays, eventually claiming the case was moot because it had decided to remove Tornado Cash from the list.

Judge Robert Pitman remarked that rather than recognizing the Fifth Circuit’s ruling as requiring the delisting of Tornado Cash, the Treasury claimed to have used its “discretion” to remove it, citing broader policy and legal factors.

The court’s decision includes a ruling that permanently prevents the Treasury from enforcing the sanctions on Tornado Cash, declaring its earlier enforcement “unlawful.”