Although the U.S. Department of the Treasury's OFAC actively removed Tornado Cash from the sanctions list in March this year and claimed that the case has no legal controversy requiring further court review, a Texas district court ruled this Monday that the case remains contentious and determined that OFAC's sanctions were unlawful, ordering a permanent ban on future similar sanctions against Tornado Cash. (Background: Is the Tornado Cash mixer controversy not over yet? Coinbase angrily criticizes: The U.S. Treasury is handling it ambiguously, evading a final resolution) (Supplementary background: The U.S. Treasury revoked sanctions against the mixer Tornado Cash: Digital assets offer opportunities for value creation, TORN surged 74%!) The latest ruling from the federal court in Texas states that the crypto mixing protocol Tornado Cash cannot be sanctioned again by the U.S. Treasury, marking the end of this nearly two-year contentious lawsuit. The judgment is also seen as a significant victory for crypto privacy technology, which will have a critical impact on the future regulatory path for crypto in the U.S. The court concluded: OFAC sanctions exceeded its authority. U.S. District Judge Robert Pitman of the Western District of Texas ruled this Monday that the sanctions imposed by the Office of Foreign Assets Control (OFAC) against Tornado Cash are "illegal and invalid," formally prohibiting the agency from imposing the same sanctions again in the future. This case originated when OFAC first listed Tornado Cash's smart contracts on the sanctions list in 2022, sparking a strong backlash from the crypto and open-source communities. In December last year, the U.S. Federal Appeals Court supported the case, determining that OFAC's actions "exceeded Congressional authorization." However, OFAC quietly removed Tornado Cash from the sanctions list in March this year but did not explicitly commit to not re-sanctioning in the future, leaving ambiguity that prompted six plaintiffs to continue pursuing the case. Treasury lawyers further argued that since OFAC proactively lifted sanctions against Tornado Cash before the district court's formal ruling (but after the appeals court ruling), the case should be viewed as having no legal controversy and no longer requiring adjudication. Extended reading: Is the Tornado Cash mixer controversy not over yet? Coinbase angrily criticizes: The U.S. Treasury is handling it ambiguously, evading a final resolution. "Enough!" The court demands the complete withdrawal of sanctions. However, for the plaintiffs, this controversy is far from over. On April 21, the plaintiffs' lawyers submitted court documents criticizing OFAC's chaotic response to the appeals court ruling, describing their conduct as "a chaotic textbook" and angrily accusing them of waving the "non-controversial flag" at the last moment, attempting to evade an unfavorable ruling. The court ultimately adopted the plaintiffs' viewpoint, clearly stating that this case has not lost its contentiousness, and that OFAC not only failed to guarantee it would not re-sanction but even indicated that it might take similar sanctions in the future. Judge Pitman was stern in his ruling, pointing out that these sanctions should be lifted and not imposed again. Compared to acknowledging that the Fifth Circuit Court had issued an order lifting the sanctions, the defendants argued that they exercised their discretion based on general policy and legal considerations. Judge Pitman stated that the government should not evade judicial oversight through this action. DOJ's direction also began to shift. Shortly before the ruling was announced, the U.S. Department of Justice (DOJ) also released signals of internal policy shifts. Deputy Attorney General Todd Blanche issued a memorandum to all prosecutors earlier this month, instructing the DOJ to cease prosecutions against exchanges, crypto mixing tools, cold wallets, and other "non-malicious violations" and to review whether existing lawsuits that do not meet the new standards should be withdrawn. This move has already impacted other cases. For example, in the criminal case against the developers of the mixer Samourai Wallet, both the prosecution and defense recently jointly requested an extension of the trial period to clarify whether DOJ's new policy applies. The DeFi Education Fund also submitted a petition to senior U.S. government officials, calling for an immediate cessation of the prosecution against Tornado Cash developer Roman Storm. The battle over open-source development rights has reached a temporary conclusion? Although Tornado Cash has officially been removed from sanctions, developers Roman Storm and Roman Semenov still face criminal charges from the DOJ for money laundering and unauthorized financial services, with the latter still on OFAC's sanctions list. This also highlights that even with the lifting of sanctions, the legal risks associated with open-source software developers have not completely dissipated. However, the signals released by this court ruling are clear: if government agencies intend to impose sanctions against open-source protocols again in the future, they may face higher legal hurdles. For the crypto industry, this is not only a victory for Tornado Cash but also an important recognition of the value of the open-source community and digital privacy.