The US Treasury Department has accused Tornado Cash of facilitating the laundering of over USD 7 billion for hackers in North Korean and other cybercriminals. According to Reuters, the ruling from the 5th US Circuit Court of Appeals in New Orleans favoured six Tornado Cash users who, with support from the cryptocurrency exchange Coinbase, had filed a lawsuit contesting the sanctions.
Some argued that federal law allows OFAC to regulate property, but Tornado Cash’s smart contracts—self-executing code for mixing cryptocurrencies—do not qualify as property. These contracts, which operate independently and cannot be altered or controlled, provide enhanced privacy by pooling and shuffling users' funds.
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