As a seasoned analyst with years of experience navigating the complex world of cryptocurrencies and blockchain technology, I find myself intrigued by the ongoing legal battle between Coin Center and the US government over Tornado Cash. From my perspective, this case is not just about a privacy-focused mixing service but rather a testament to the grey areas that exist in the rapidly evolving digital asset landscape.
Coin Center has decided to challenge a previous decision made by the U.S. District Court in Northern Florida. This verdict stated that Tornado Cash, in some way, provides indirect advantages for foreign entities and individuals, which could be classified as a financially significant interest under scrutiny from the Office of Foreign Assets Control (OFAC).
Jeffrey S. Hetzel, legal representative for Coin Center, proposed a straightforward resolution to the court of appeals at the 11th Circuit: “It would be simplest if the court rules that in our plaintiffs’ transactions, there is no foreign property involved. The lower court should have removed the term ‘property’ from the statute.” Hetzel further elaborated on his argument stating:
“The government, on appeal, says that the software published at the banned addresses is property, but the software is non-proprietary lines of code that no one on the planet can own, control, or alter in any way.”
U.S. attorneys argued against Hetzel by stating that the increase in value of the Tornado Cash token (TORN) directly profited its holders, and furthermore, they claimed that withdrawal fees acted as accumulated advantages for the creators of the protocol.
2022 Coin Center lawsuit filed for US Tornado Cash users
Last August, the U.S. Treasury Department imposed restrictions on more than 40 digital wallets that were suspected of being linked with the Tornado Cash cryptocurrency mixing platform.
Currently, the Treasury Department asserts that these people and organizations are connected to about $7 billion worth of money laundering activities and illegal dealings.
2022 saw Coin Center filing a lawsuit in defense of U.S. users who rely on the service for privacy protection, following actions taken by the U.S. Treasury.
Coin Center’s legal team contended that the Office of Foreign Assets Control (OFAC) and the U.S. Treasury Department overstepped their legal bounds when they imposed sanctions on the mixing service. The lawyers emphasized that this service was utilized for legitimate purposes by their clients.
Just a short while following the sanctioning of Tornado Cash, the U.S. Treasury made it clear that simply sharing or reproducing the Tornado Cash software code on the internet is not considered a violation of these sanctions.
The Treasury Department advised those who utilized the service prior to its authorization to submit an application for an OFAC license, assuring them that legitimate transactions would be granted approval.
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2024-11-20 21:12