According to a new lawsuit filed in the US District Court, the Western District of Texas. On Thursday, six users of Ethereum blockchain and cryptocurrency mixer Tornado Cash sued the US Treasury Department, alleging that 44 Tornado Cash smart contract addresses on the Office of Foreign Asset Control’s Specially Designated Citizens (SDN) list Its recent designation. OFAC) is “not in accordance with the law”.
As of August 8, US individuals and entities have been banned from interacting with approved Tornado Cash smart contract addresses, blockchain or business-wise, under threat of criminal or civil penalties for non-compliance. The plaintiffs seek to annul the designation on the basis of three arguments. First, they argue that Tornado Cache does not meet the definition of an asset, a foreign country, or its national, nor an individual and therefore cannot be added to the SDN list.
Second, they claim a violation of their First Amendment (freedom of speech) rights under the US Constitution:
“Tornado Cash allows plaintiffs to engage in important, socially valuable speech. However, because of the designation, plaintiffs allow Tornado Cash to donate to support important, and potentially controversial, political and social causes.” Can’t use it.”
Third, plaintiffs say that because of the Treasury designation, they could not access the ether stored in the Tornado Cash Pool. They argued that such an alleged lack of proper pre-evasion process was in violation of legal procedures.
Later that day, cryptocurrency exchange Coinbase publicly supported the lawsuit. The firm hailed the move as “protecting privacy in crypto” and pledged to fund the lawsuit. “The sanctions exceed the authority of the Treasury, harm innocent people, remove privacy and security options for crypto users, and stifle innovation,” Coinbase said. It then took up separate examples of the alleged benefits of Tornado Cash:
“A man anonymously used Tornado Cash to donate funds to Ukraine. Later, his wallet received potentially malicious airdrops. But because he anonymized his cryptocurrency before donating, he Avoided attacks against personal accounts. He has money stuck in Tornado Cash.”
“Developers are concerned that they may be held responsible for something they have nothing to do with or have the ability to control,” Coinbase said in an argument. The US Treasury Department claims that over $7 billion worth of cryptocurrency has been laundered through Tornado Cash since its inception. Stablecoin issuers like Circle have taken steps Freeze blacklisted Tornado Cash smart contract addresses due to restrictions. Others, such as Tether, have avoided such a move until instructions are received from law enforcement.
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— paulgrewal.eth (@iampaulgrewal) 8 September 2022
This morning, Brian Armstrong shared why Coinbase is funding and supporting a challenge by six individuals (including two CB employees) against novel sanctions of open source software involving the Treasury Department and OFAC’s Tornado Cash. https://t.co/8l5iKAjVZg
