Coin Center Loses Appeal Over Tornado Cash Sanctions
Meta Description: US Court dismisses Coin Center’s appeal against Treasury Department sanctions on Tornado Cash. Developer Roman Storm still faces trial for money laundering and related charges.
Key Takeaways
- End of legal dispute: US Court of Appeals officially dismissed Coin Center’s appeal against Tornado Cash sanctions
- Market reaction: TORN token surged 14% before retracing, reflecting volatility on legal news
- Policy shift: Treasury Department removed Tornado Cash from sanctions list in March 2024 following court ruling
- Serious legal situation: Developers still face serious criminal charges, including money laundering and sanctions violations
- Broader impact: The case sets important precedent for regulation of cryptocurrency mixing services in the future
The dismissal came days before Tornado Cash developer Roman Storm was scheduled to face charges in US federal court.
The U.S. Court of Appeals for the Eleventh Circuit has formally dismissed an appeal filed by crypto advocacy group Coin Center against the U.S. Treasury Department. The appeal challenged the 2022 sanctions imposed by the Office of Foreign Assets Control (OFAC) on the Tornado Cash cryptocurrency mixer.
In a filing on Thursday, the court granted a joint motion to vacate a lower court ruling and remand with instructions to dismiss the case, marking the official conclusion of Coin Center’s legal challenge. This development follows a coordinated filing between Coin Center and the Treasury Department, effectively ending the dispute over OFAC’s authority.
Background of Sanctions
In 2022, OFAC added several wallet addresses associated with Tornado Cash to its Specially Designated Nationals and Blocked Persons (SDN) list, alleging the protocol was used to launder billions in illicit funds. Coin Center responded with a lawsuit, arguing that the Treasury had overstepped its statutory authority. Other challenges also emerged, including a lawsuit from six Tornado Cash users, which was financially backed by Coinbase.
Following the news of the court dismissal, the TORN token spiked over 14%, reaching $10.55 before retracing to $9.47, reflecting the market’s volatility in response to legal events.
“This is the official end to our court battle over the statutory authority behind the [Tornado Cash] sanctions,” said Coin Center executive director Peter Van Valkenburgh in a Monday X post. “The government was not interested in moving forward and defending their dangerously overbroad interpretation of sanctions laws.”
Recent Policy Changes
In January 2024, the U.S. District Court for the Western District of Texas ordered the repeal of OFAC’s sanctions in response to the lawsuit from the six Tornado Cash users. Subsequently, in March 2024, the Treasury Department formally removed Tornado Cash from the SDN list, claiming the case had become “moot” and no longer required judicial resolution.
Tornado Cash Developers Still in Legal Trouble
Despite the regulatory rollback, legal troubles continue for Tornado Cash’s developers. The appellate court’s decision came just two weeks before Roman Storm, one of the protocol’s co-founders, is set to stand trial in New York federal court.
Storm is still facing multiple charges, including money laundering, conspiracy to operate an unlicensed money transmitter, and violating U.S. sanctions laws. It remains unclear whether the dropped appeal or the earlier policy reversals will have any impact on his criminal case.
Another Tornado Cash developer, Alexey Pertsev, has already been convicted of money laundering in the Netherlands and sentenced to more than five years in prison. Meanwhile, Roman Semenov, the third developer named in the U.S. indictment, remains at large.
The dismissal of Coin Center’s appeal brings a close to a significant legal chapter in the ongoing battle over crypto privacy and government enforcement. However, with Tornado Cash’s developers still facing trial and lawmakers paying increasing attention to crypto mixing services, the case is likely to serve as a precedent-setting moment in the regulation of decentralized privacy technologies.
