Tornado Cash Can’t Be Sanctioned Again, Texas Judge Rules
U.S. District Judge Robert Pitman of the Western District of Texas said that the case was not moot, and sided with the plaintiffs, ruling that OFAC’s designation of Tornado Cash was unlawful and the agency is therefore permanently enjoined from enforcing sanctions against it
A Texas judge ruled Monday that the U.S. Treasury Department's sanctions against Tornado Cash were unlawful, permanently enjoining the agency from enforcing them.
The U.S. Department of Justice is still pursuing criminal charges against Tornado Cash developers.
Tornado Cash is officially safe from U.S. sanctions, following a district court ruling on Monday.
The Treasury Department’s Office of Foreign Asset Control (OFAC) removed Tornado Cash from its sanctions list in March, several months after an appeals court ruled that the agency had “overstepped its Congressionally-defined authority” by sanctioning the crypto mixing service’s smart contracts back in 2022.
However, the way that OFAC de-listed Tornado Cash, and the subsequent notices and motions its lawyers filed with the court in March, left apparent wiggle room for the agency to put the mixing service back on its no-fly list in the future, a federal judge said. The Treasury attorneys argued that, because OFAC had revoked sanctions against Tornado Cash before the district court’s final judgment (but after the appeals court’s decisive ruling), the issue was moot.
But, to the six plaintiffs in Van Loon vs. Treasury — all users of Tornado Cash — the issue was not, in fact, moot. In an April 21 filing, their lawyers blasted OFAC’s response to the Fifth Circuit’s ruling, calling it “a study in chaos” and accusing them of “wav[ing] the mootness flag” in a last-ditch effort to “evade an adverse judgment.”
“Enough is enough,” lawyers for the plaintiff told the judge. “It is time for this Court to do what the Fifth Circuit ordered months ago … Defendants’ designation must be held unlawful and set aside.”
In his sternly-worded ruling yesterday, U.S. District Judge Robert Pitman of the Western District of Texas said that the case was not moot, and sided with the plaintiffs, ruling that OFAC’s designation of Tornado Cash was unlawful and the agency is therefore permanently enjoined from enforcing sanctions against it.
