Coinbase Says It Is Funding Lawsuit Against Tornado Cash Sanctions

Anvesh Reddy
September 8, 2022
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Tornado cash coinbase lawsuit

Crypto exchange Coinbase on Thursday said it is funding a lawsuit brought by six people challenging the Treasury Department’s sanctions of Tornado Cash. Tornado Cash, often referred to as a crypto mixer, is an open source software running on the Ethereum blockchain. On August 8, the U.S. authorities sanctioned the crypto mixer for allegedly laundering money worth billions. The Office of Foreign Assets Control (OFAC) found activities of a U.S. sanctioned hacker group on the software.

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Coinbase Now Supporting Lawsuit To Relieve Tornado Cash From Sanctions

The authorities accused the company of laundering funds related to cybercrimes in the country. They described Tornado as a virtual currency mixer that ‘launders the proceeds of cybercrimes‘. Tornado Cash  preserves privacy by allowing users to deposit assets from one crypto address and withdraw them using a different crypto address. The OFAC had at the time accused the crypto mixer of laundering more than $7 billion in crypto assets since 2019. The authorities further said that a part of the laundered money was associated with a Korea based hacking group.

Meanwhile, Coinbase said that it is not favoring unlawful behavior but protested the ban on the technology as a whole. The crypto exchange felt a blanket sanction on open-source code could have a chilling effect on innovation. Sanctioning open source software not the best way to solve the issue, Coinbase explained.

“We have no issue with the Treasury sanctioning bad actors and we take a hard stance against unlawful behavior. But in this case, Treasury went much further and took the unprecedented step of sanctioning an entire technology instead of specific individuals.”

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Did The U.S. Authorities Go Beyond Its Limits?

The crypto exchange argued in its blog that the Treasury department went much further in the case of Tornado Cash. The department took the unprecedented step of sanctioning an entire technology instead of specific individuals, it added. Coinbase indicated that the bad actors like the activities of North Korean hackers should have been curtailed instead of the sanctions. “We have no issue with the Treasury sanctioning bad actors.”

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Anvesh reports major crypto updates around U.S. regulation and market moving trends. Published over 1400 articles so far on crypto and blockchain. A proud dropout of University of Massachusetts, Lowell. Can be reached at [email protected] or x.com/BitcoinReddy or linkedin.com/in/anveshreddybtc/
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.