Blockchain Association Files Amicus Brief in Coin Center Lawsuit Against US Treasury Secretary Over Tornado Cash Sanctions

The Blockchain Association has filed an amicus brief in an ongoing lawsuit by the Coin Center think tank against the Treasury Department and its sanctions watchdog, the Office of Foreign Asset Control.

In the lawsuit, filed last October, Coin Center has alleged that the US Treasury Department’s sweeping sanctions against crypto mixer Tornado Cash harmed Americans and their ability to transact privately using the Ethereum network.

“It’s important to recognize that Tornado Cash is simply a tool – to punish the tool itself simply because it can be used by anyone, including bad actors, goes against the values ​​this country was founded on,” Blockchain Association CEO Kristin Smith said in a statement. “The Blockchain Association stands with Coin Center, advocating for the responsible and legal use of blockchain technology. Regulatory actions should only be directed at bad actors who misuse this tool for illegal purposes.”

The case was the second the legal group brought against the Treasury Department, and the second lawsuit against the Treasury Department over the Tornado Cash sanctions.

OFAC sanctioned Tornado Cash last August, saying North Korean hackers had laundered hundreds of millions of dollars worth of crypto through the mixer since its launch. About 20% of Tornado Cash’s total transaction volume was linked to one hack or another, the federal government alleged.

The crypto industry has strongly opposed this, stressing that OFAC does not normally sanction software and that Tornado Cash does not have a central operator.

There are legitimate uses for individuals to use privacy-enhancing tools like Tornado Cash, the lawsuit argued, and OFAC’s sanctions against the privacy mixer — which works by pooling funds to hide the sender of a given transaction — means those individuals are now effectively exposing their entire transaction history to everyone which looks at the network data.

“An order effectively requiring Defendants to decriminalize the use of the 20 Tornado Cash addresses would allow Plaintiffs to conduct their legitimate activities with some degree of anonymity, use their preferred software tools without fear of punishment, and engage in important expressive associations” , the lawsuit states. . “Judicial relief will also serve the public interest by averting harm to Tornado Cash users who are US persons, to Ethereum as a freedom- and privacy-enhancing technology, and to the important sector of the economy that relies on Ethereum.”