The U.S. Court of Appeals has overturned sanctions on crypto mixer Tornado Cash, ruling that the Treasury’s definition of “property” was invalid. Following the decision, TORN token surged over 200% before stabilizing.
Court Decision on Tornado Cash
The US government’s restrictions against cryptocurrency mixer Tornado Cash (TORN) have been overturned by a recent court decision.
The prior ruling to impose penalties on the digital assets tumbler has been revoked, the U.S. Court of Appeals for the Fifth Circuit, located in New Orleans, said in a recent filing.
“It is ordered and Adjudged that the judgment of the District Court is reversed, and the cause is remanded to the United States Court of Appeals District Court for further proceedings in accordance with the opinion of this Court.”
The Office of Foreign Asset Control (OFAC) of the Treasury Department first banned Tornado Cash because it was thought to be a security risk because hackers connected to the North Korean government were using it to purify stolen money.
By combining their digital assets with other currencies from other sources and returning the dollar amount that each user entered, cryptocurrency mixers enable users to conceal the source of their assets.
The court decided in November that the OFAC’s sanctions did not accurately define “property.” He continued by saying that Tornado Cash and its smart contracts wouldn’t qualify if “property” meant “capable of being owned,” making the sanctions illegal.
“Contrary to the Department’s arguments, the immutable smart contracts are not services. So even when we consider OFAC’s regulatory definitions, the immutable smart contracts are not property because they are not ownable, not contracts, and not services.”
After hearing of the historic decision, TORN saw a huge surge, rising from $8.08 on January 21 to a peak of $25.28, a 212% gain. Since then, the token has retraced and is currently trading at $19.57.
