Coin Center prepares legal challenge to Treasury's Tornado Cash sanctions

Quick Take

  • Crypto’s leading policy think tank is weighing a court challenge to the Treasury’s sanctioning of decentralized transaction mixer Tornado Cash.
  • Coin Center argues that smart contracts cannot be sanctionable entities and that such a standard would be dangerous for coders worldwide.

Coin Center, a crypto-focused policy think tank, is prepping a challenge to the Treasury's sanctions on Tornado Cash.

In an August 15 blog post, Coin Center analyzed the contradiction of sanctioning a smart contract. "By treating autonomous code as a 'person' OFAC exceeds its statutory authority," wrote Jerry Brito and Peter Van Valkenburgh, respectively Coin Center's executive director and director of research.

The Tornado Cash sanctions targeted the smart contract that runs the DeFi mixer as well as a fleet of crypto wallets associated with the coders behind the project. But, Coin Center argues, a smart contract, unlike other designated entities, cannot challenge a designation from the Treasury's Office of Foreign Assets Control in court.

"This action sends a signal—indeed seems to have been intended to send a signal—that a certain class of tools and software should not be used by Americans even for entirely legitimate purposes," the blog says. 

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