The elimination comes after a US appeals court said in January that the penalties were illegal.
On March 21, the US Treasury Department said that it has removed cryptocurrency mixer Tornado Cash off its list of sanctions.
The withdrawal comes after a US appeals court ruled in January that Tornado’s smart contracts cannot be sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC) as they are not owned by any foreign citizen.
“The immutable smart contracts (the lines of software code that enable privacy) of Tornado Cash are not the ‘property’ of a foreign national or entity, meaning […] OFAC overstepped its congressionally defined authority,” the court said in January.
The Treasury announced in a statement released on March 21 that OFAC has taken several dozen smart contract addresses connected to Tornado on the Ethereum blockchain network off of its list of sanctions.
According to CoinMarketCap statistics, Tornado Cash (TORN), the native currency of Tornado, is up almost 60% as a result of the announcement.
According to the statistics, as of March 21, TORN’s market capitalization is around $73 million, and its fully diluted value (FDV) is close to $140 million.
The Treasury’s agency responsible for enforcing trade and economic sanctions on nations and foreign individuals is called OFAC.
By allowing users to aggregate cryptocurrency contributions into a mixer and then withdraw them to several wallet addresses, Tornado Cash makes it difficult to identify the initial funding source.
On the news, TORN has increased by over 60%. CoinMarketCap is the source.
Related: Defense claims that Tornado Cash dev Alexey Pertsev’s bail is a “crucial step” in obtaining a fair trial.
Tornado Cash was sanctioned by OFAC in August 2022 when it was claimed that the blockchain technology assisted in the laundering of bitcoin that was taken by the North Korean hacker group Lazarus Group.
Lazarus Group is accused of using a variety of hacks to steal billions of dollars’ worth of cryptocurrency.
Lazarus was charged in February with stealing $1.4 billion from Bybit, a digital asset exchange, in the biggest cryptocurrency hack ever.
The US Treasury claims that since the protocol’s inception in 2019, Tornado Cash has allegedly helped launder more than $7 billion in illegal cash.
One of Tornado Cash’s inventors, Alexey Pertsev, was found guilty of money laundering by a Dutch court in 2024 and given a 64-month jail term.
Pertsev was placed under house arrest in February as he worked on his conviction appeal.
For Pertsev’s defense, the Ethereum Foundation has promised to provide $1.25 million.
In an X post announcing the gift on February 26, the EF said, “Writing code is not a crime, and privacy is normal.”
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