A significant legal chapter involving the cryptocurrency mixer Tornado Cash and the U.S. government has reached a conclusion. A federal court in Texas has definitively prevented the Treasury Department from reinstating previously imposed sanctions against the platform, marking a final resolution to this particular dispute over those specific measures.
Background of the Sanctions
The controversy originated in 2022 when the Treasury Department’s Office of Foreign Assets Control (OFAC) added Tornado Cash to its sanctions list. Authorities alleged the service was instrumental in laundering approximately $7 billion in illicit funds. Notably, these funds included proceeds linked to the North Korean cybercrime organization known as the Lazarus Group.
Legal Challenges and Delisting
This designation by OFAC immediately triggered legal challenges against the Treasury Department’s decision. In a key development preceding the final court order, Tornado Cash was formally removed from the sanctions list last month.
Following this delisting, the Treasury Department contended that the legal case had become irrelevant (moot) and therefore did not necessitate a final judgment. Critics suggested this was a tactic to potentially re-impose sanctions later.
Court Blocks Re-Sanctioning Efforts
However, U.S. District Judge Robert Pitman rejected the Treasury’s stance in a ruling issued on Monday. The judge noted concerns that Treasury officials appeared prepared to reimpose the very same sanctions that had been contested through the legal process.
Judge Pitman emphasized that the removal of Tornado Cash from the sanctions list was not merely a discretionary policy adjustment but a required action resulting from court orders. Consequently, the court’s decision establishes a permanent injunction. This legally bars the Treasury Department from reapplying the specific sanctions against Tornado Cash that the judge had previously determined were unlawful.
Tyler Matthews, known as “Crypto Cowboy,” is the newest voice at cryptovista360.com. With a solid finance background and a passion for technology, he has navigated the crypto world for over a decade. His writing simplifies complex blockchain trends with dry American humor. When not analyzing markets, he rides motorcycles, seeks great coffee, and crafts clever puns. Join Crypto Cowboy for sharp, down-to-earth crypto insights.