The recent decision by a US federal appeals court has led to the revocation of sanctions against Tornado Cash (TORN), a platform designed to anonymize cryptocurrency transactions. The court concluded that the US Treasury Department had overstepped its authority with the sanctions, asserting that the smart contracts associated with Tornado Cash do not constitute property under current legal frameworks.
How Did the Court Justify Its Decision?
Sanctions were initially imposed by the Office of Foreign Assets Control (OFAC) last year, claiming that Tornado Cash was linked to illicit activities by groups like North Korea’s Lazarus Group. The appeals court countered this, stating that the technology could not be scrutinized through the lens of the International Emergency Economic Powers Act, indicating a limitation in the Treasury’s jurisdiction.
What Impact Did the Ruling Have on TORN Coin?
The court ruling has had an immediate and dramatic effect on Tornado Cash’s primary asset, TORN coin, which saw its price increase by over 500%, surpassing $20 shortly after the announcement. This follows a period where the coin’s value had plummeted below $8, reflecting the market’s response to the sanctions.
Key takeaways from the ruling include:
– The court deemed the Treasury’s sanctions as an overreach of authority.
– Existing regulations cannot adequately govern technologies like Tornado Cash.
– The ruling may inspire future legal challenges against similar regulatory actions in the cryptocurrency domain.
Industry experts believe this ruling marks a significant decrease in regulatory pressure on the cryptocurrency market, potentially paving the way for more robust frameworks that respect the technological innovations within the space.
