On the second day of Trump’s presidency, the US District Court for the Western District Court of Texas overturned the sanctions imposed on Tornado Cash by the US Treasury’s Office of Foreign Assets Control (OFAC). The ruling, issued on January 21, 2025, is being celebrated as a major victory in advancing more innovation-friendly regulations for privacy-preserving blockchain technology.
After Silk Road, Crypto Community Eyes On Tornado Cash Case
Tornado Cash, a decentralized cryptocurrency mixing protocol, was sanctioned by OFAC in August 2022 on allegations that it facilitated illicit transactions, including money laundering for the North Korean cybercriminal group Lazarus. According to reports, the infamous group allegedly funneled more than $455 million in stolen digital assets through the protocol.
After OFAC’s sanction, six Tornado Cash users filed an appeal, arguing that the agency had overstepped its statutory authority. Their appeal, submitted on November 26, 2024, contended that the immutable smart contracts used by Tornado Cash do not constitute the “property” of any foreign national or entity. The court’s ruling stated that “OFAC overstepped its congressionally defined authority.”
Despite this legal victory for Tornado Cash, the platform’s developer, Alexey Pertsev, remains in custody. In May 2024, Dutch judges at the Court of Appeal of ‘s-Hertogenbosch found him guilty of money laundering, sentencing him to five years and four months in prison.
During his trial, Pertsev argued that he should not be held accountable for how users utilize Tornado Cash’s decentralized protocol. However, the court ruled that he and his co-founders could have taken additional measures to mitigate misuse.
However, under Trump’s administration, the voices advocating for Tornado Cash’s creators are becoming louder. Vitalik Buterin, a co-founder of Ethereum, stated that “Tornado Cash itself won an important case today”. He raised his voice against the system that ‘unfairly’ punished innovators, including Ross Ulbricht, who operated Silk Road, the dark web marketplace.
No man left behind.@rstormsf and @alex_pertsev next.
Tornado Cash itself won an important case today:https://t.co/ceF9IKlllC https://t.co/zg69SmZY8K
— vitalik.eth (@VitalikButerin) January 22, 2025
However, Donald Trump fulfilled the promise he made during the election campaign, as he signed a full and unconditional pardon for Ross Ulbricht. Ulbricht was convicted in 2015 in New York in a narcotics and money-laundering conspiracy and sentenced to life in prison. After his release, Vitalik said, Alex Pertsev and Roman Storm are next, saying “no man left behind.”
Also Read: Vitalik Defends Ethereum Foundation Leadership Amid Online Hate
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