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Blockchain Association Submits Amicus Brief Supporting Coin Center's Lawsuit Against U.S. Treasury Regarding Tornado Cash Sanctions
The Blockchain Association has submitted an amicus brief in the ongoing lawsuit led by think tank Coin Center against the Treasury Department and its sanctions enforcement agency, the Office of Foreign Asset Control.
In the lawsuit filed in October, Coin Center has accused the U.S. Treasury Department of imposing extensive sanctions on crypto mixer Tornado Cash, which allegedly resulted in harm to Americans and their ability to engage in private transactions on the Ethereum network.
"It's critical to recognize that Tornado Cash is simply a tool – punishing the tool itself simply because it can be used by anyone, including bad actors, runs contrary to the values this country was founded upon,” Blockchain Association CEO Kristin Smith said in a statement. “Blockchain Association stands with Coin Center, advocating for the responsible and lawful use of blockchain technology. Regulatory actions should only be targeted at bad actors who abuse this tool for illegal purposes."
The advocacy group filed its second lawsuit against the Treasury Department, making it the second legal action they initiated in response to Treasury's Tornado Cash sanctions.
In August of last year, the Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash, citing allegations that North Korean hackers had utilized the mixer to launder hundreds of millions of dollars' worth of cryptocurrency since its inception. The federal government claimed that approximately 20% of Tornado Cash's total transaction volume was associated with various hacking incidents.
The crypto industry has strongly opposed this action, emphasizing that OFAC typically does not impose sanctions on software and noting that Tornado Cash lacks a central operator.
The lawsuit argued that there are legitimate purposes for individuals to utilize privacy-enhancing tools such as Tornado Cash. However, the sanctions imposed by OFAC on the privacy mixer, which operates by pooling funds to obscure the sender of a transaction, result in these individuals inadvertently revealing their complete transaction history to anyone examining network data.
“An order effectively requiring Defendants to decriminalize use of the 20 Tornado Cash addresses would allow Plaintiffs to conduct their legitimate activities with some measure of anonymity, use their preferred software tool without fear of penalties, and engage in important expressive associations,” the suit said. “Judicial relief would also serve the public interest by averting harm to Tornado Cash users who are United States persons, to Ethereum as a freedom and privacy enhancing technology, and to the important sector of the economy that depends on Ethereum.”
