-A US court has sided with Tornado cash, striking down sanctions, saying Smart Contracts "are not proprietary" - Daily Hodl
a US Court of Appeals has ruled that the Treasury Department's sanctions against #cryptocurrency mixer Tornado Cash were illegal and exceeded its authority. In 2022, the Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash. It allows users to impersonate users and anonymize cryptocurrency transactions on the #Ethereum (ETH) network. It was because of allegations that North Korean agents allowed them to launder stolen funds.
Since then, its developers have faced lengthy lawsuits and jail time.
ow the Fifth Circuit Court of Appeals in New Orleans, led by Judge Don Willett, has ruled that OFAC's sanctions mischaracterize the term "property" in the anti-services law. Judge Willett says that under the International Emergency Economic Powers Act, the president is "authorized to block property in which a foreign country or its nationals have an interest.
But Willett said that if the definition of "property" is something that "may be owned, then Tornado Cash and its immutable #smart contracts can't see it that way and would make sanctions very difficult.
The judge also notes that Tornado Cash's smart contract is "immutable and undetectable, so it is available to anyone, including North Korean criminals, and can continue to be used despite sanctions. According to Willett, "More importantly, Tornado Cash, as defined by Ofac, does not own the services provided by immutable smart contracts. A landlord owns the right to a garbage collection service, and a customer may own the right to a legal service provided by a solicitor, but neither the landlord nor the customer owns the person providing the garbage collection service or the solicitor - and for good reason.
Contrary to the Department's argument, non-variable smart contracts are not services.
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