US Treasury Department Faces Lawsuit For Banning Tornado Cash

October 12, 2022

On August 8, OFAC added Tornado Cash to its Specially Designated Nationals list, marking the first time that code was added to the sanctions list.

 U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) allegedly overreached its authority, lawsuit claims.

The lawsuit alleges the agency only has the authority to block Americans from “transacting with a foreign person or major foreign entity” as outlined in the International Emergency Economic Powers Act.

The plaintiffs argued that when they use Tornado Cash they do not engage with any foreign person or entity.

Also, they are only using publicly available Ethereum software to move their own property (digital assets) from one wallet they control to another.

Jerry Brito, executive director of Coin Center tweeted that they are fighting for privacy rights.

OFAC claims that it had facilitated money laundering to criminal organizations such as the North Korean state-backed Lazarus Group through more than US$7 billion worth cryptocurrency