Coin Center sues Treasury over Tornado Cash sanctions

Quick Take

  • The D.C.-based policy nonprofit sued the Treasury Department, saying it overstepped its authority when it sanctioned transaction mixer Tornado Cash in August. 

Washington, D.C.-based policy nonprofit Coin Center is suing the Treasury Department over its sanctioning of Tornado Cash, the open source software that can be used to anonymize transactions on the Ethereum blockchain. 

Treasury’s August sanctioning of the transaction mixer, “exceeded their statutory authority because Tornado Cash is used to complete functions that do not include 'any property in which any foreign country or a national thereof has any interest,'” the co-plaintiffs argue in their brief. Joining Coin Center on the suit are an anonymous human rights advocate based in the Southeastern United States, a software developer who used the Ethereum blockchain, and David Hoffman, a digital asset manager.

The lawsuit is the second against the Treasury Department over the sanctioning. U.S. crypto giant Coinbase is backing a lawsuit filed last month by six individuals who used the software, including two Coinbase employees. 

Challenges to Treasury’s sanctioning of the software could be landmark cases for blockchains. The nonprofit and Coinbase-backed lawsuits seek to convince the court that the government overstepped its authority in targeting software, rather than an individual or entity, as well as overstepping the statutory language and intent giving Treasury the power to issue economic sanctions. 

“Americans use Tornado Cash unilaterally to protect their own property,” the suit continues. Treasury’s “defiance of this statutory element assumes an authority that would give them virtually unlimited control to regulate the American economy.”

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy