U.S. Treasury Drops Lawsuit Related to Tornado Cash

The U.S. Department of the Treasury and the advocacy group Coin Center have agreed to end the appellate lawsuit related to the Ethereum mixing tool Tornado Cash.

On Thursday, the U.S. appellate court approved a joint motion to vacate the ruling and request to dismiss the lawsuit. Both parties agreed that this appeal "no longer holds significance" as OFAC has lifted the economic sanctions against #TornadoCash .

Peter Van Valkenburgh, Executive Director of Coin Center, stated that the government did not wish to argue about its legal authority to sanction Tornado Cash's smart contracts in court. Previously, in November, a judge ruled that the government had exceeded its authority when sanctioning these smart contracts, arguing that they could not be classified as property because they are immutable.

Background and Outstanding Case

The U.S. government sanctioned Tornado Cash in 2022, claiming that the service was used by Lazarus Group, a state-sponsored hacking group from North Korea, to launder billions of dollars. The developers of Tornado Cash were subsequently also accused of money laundering.

Although OFAC has changed its decision, Tornado Cash co-founder Roman Storm still faces a trial for money laundering expected to begin in the coming week at #Newyork . Tornado Cash developer Alexey Pertsev was released on supervised bail in the Netherlands in February after being sentenced to 64 months in prison.