Tornado Cash’s token spiked by over 400% after the court reversed the Treasury’s sanctions.
The court ruled that smart contracts operating independently cannot be owned or controlled.
This decision highlights the need for updated laws to address privacy and decentralization in distributed ledger technology.
A U.S. appeals court has overturned prohibitions on Tornado Cash’s smart contracts and ruled that the Treasury Department overstepped its authority. The Fifth Circuit Court stated that the arrangements are not property under federal law because they operate without human intervention.
Source: Twitter (X)
Smart Contracts Classified as Autonomous Tools
The tribunal explained that Tornado Cash’s smart contracts are not services or property because they execute independently and cannot be controlled. These agreements were designed in 2019 to provide users with privacy by anonymizing Ethereum transactions, making it difficult to trace transfers.
The immutability of these contracts is guaranteed because their admin keys were permanently removed, preventing anyone from modifying or controlling the system. The ruling supports the idea that decentralized tools function differently from traditional platforms and cannot be governed the same way.
This decision also highlighted how decentralized systems like Ethereum do not have a single entity in charge, showing their unique structure.
Treasury’s Authority Challenged by the Court
The court also said the Treasury’s Office of Foreign Assets Control (OFAC) cannot interpret existing laws to fit blockchain tools. It added that only Congress has the authority to make laws for regulating new technologies like smart contracts and decentralized platforms.
Legal professionals praised the decision for setting boundaries on how the government can regulate blockchain technology and privacy tools. Bill Hughes, a lawyer from ConsenSys, noted that the decision clarified that immutable smart contracts are beyond the jurisdiction of existing laws.
Hughes also pointed out Coinbase’s role in fighting the sanctions and said this decision will likely remain unchallenged. The ruling sets a precedent for protecting developers of decentralized software and tools.
Future of Blockchain Privacy Under Scrutiny
The court's decision will impact how privacy tools are treated and may influence ongoing legal cases involving blockchain developers. It protects creators of decentralized platforms and limits government overreach in emerging technologies.
This ruling also raises an important question about how privacy-focused blockchain tools will be regulated in the future. The decision shows a need for lawmakers to create updated frameworks for new technologies while protecting innovation and privacy.
The post Court Overturns Tornado Cash Sanctions, Crypto Token Soars Over 400% appeared first on Crypto News Land.
