US Treasury Department sued by crypto investors backed by industry giant Coinbase
A group of Tornado Cash users is suing the US Treasury Department over its decision to add the crypto mixer to the Specifically Designated Nationals and Blocked Persons (SDN) list.
In a complaint filed in the US District Court, Western District of Texas, the plaintiffs claim that the sanction against Tornado Cash violates their rights and threatens their ability to engage in free and private financial transactions.
“As a result of the August 8 designation, no Ethereum user subject to US jurisdiction can legally use the Tornado Cash privacy protocol for any purpose without fear of serious consequences from government enforcement. Plaintiffs and other law-abiding citizens are prohibited from depositing, withdrawing , send or receive funds through Tornado Cash even when the funds have no connection to illegal activity.”
Treasury Secretary Janet Yellen and Office of Foreign Assets Control (OFAC) Director Andrea Gacki are also named defendants in the case. Last month, Congressman Tom Emmer of Minnesota also sent a letter to Yellen questioning the legality of sanctioning Tornado Cash, which is not a person, property or entity.
Crypto exchange Coinbase says it funded the lawsuit to challenge and remove the sanction.
“As one of the largest companies in crypto, we have a responsibility to defend the crypto industry against actions that go too far and treat crypto on an uneven playing field. It’s not enough to just say we disagree and sit on the sidelines. That’s why we are funding and supporting this lawsuit.”
Coinbase Legal Officer Paul Grewal says Banning Tornado Cash doesn’t just affect the bad actors.
“This legal challenge is about how OFAC exceeded the authority Congress and the President gave it in sanctioning open source technology, instead of sanctioning the bad actors who used it or the property of the bad actors.
The sanctions against this open source software have not only blocked its use by US persons, but cryptographers and developers have also been scared away from contributing to other important privacy projects, fearing that their code will be sanctioned in the future.
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Featured image: Shutterstock/Warm_Tail
