According to ConsenSys lawyer Bill Hughes, the U.S. Court of Appeals ruled that the U.S. Department of the Treasury exceeded its authority by sanctioning Tornado Cash’s immutable smart contracts. The court determined that these smart contracts, created through a "trusted setup ceremony," cannot be owned by any entity, and therefore do not qualify as "property" or "services." The ruling clarifies the boundaries of the Treasury Department and the Office of Foreign Assets Control (OFAC) in digital asset regulation, though it does not imply that other parts of Tornado Cash are not subject to sanctions. The key issue was the smart contracts without administrator keys.