© Reuters Paul Grewal Sides with US Treasury Plaintiffs vs. Tornado Crash Case
- Coinbase’s CLO wrote about the US Treasury Department’s legal challenge to Tornado Cash in a recent tweet.
- Paul Grewal says the plaintiffs’ points point to the government’s attempt to ban open source software.
- Grewal concludes that plaintiffs claim their basic legal requirements under the First Amendment.
In a recent thread of tweets, Coinbase’s Chief Legal Officer, Paul Grewal, addressed the legal challenge to the sanctions imposed by the US Treasury on Tornado Cash. According to him, the summary of the response seeking to lift these designations filed by the plaintiffs is “worth a read.”
In their legal challenge to the penalties imposed by the US Treasury on Tornado Cash, the plaintiffs filed their response memorandum seeking to have these ratings lifted. It’s worth a read. 1/7 https://t.co/T07QCzQ9Ru
– paulgrewal.eth (@iampaulgrewal) May 24, 2023
Grewal reports that the plaintiffs have made four points that all address the government’s attempt to ban the use of open source software using copyright law.
Additionally, review the four bullet points in the rest of this topic. The first argument is that the US Treasury’s sanctions against Tornado Cash are based on the assumption that anyone holding the TORN digital token is a member of a legally recognized entity called “Tornado Cash.” He says: This is a novel as a legal theory, and it is wrong in terms of facts.
The second argument deals with the law stating that sanctions can only prevent “property”. Grewal insists that while the legal definition of property is something that can be owned, the open-source and immutable smart contracts at the heart of the privacy software cannot be owned, controlled or altered by any party.
Thus, in the third argument, Grewal acknowledges that no one including founders, developers, and users who own TORN in their wallets, has an ownership interest in immutable smart contracts.
Meanwhile, the latter argument suggests that punishing Tornado Cash unconstitutionally burdens speech under the First Amendment. Coinbase (NASDAQ: CLO) recalls that plaintiffs used the software to protect their privacy while engaging in key First Amendment rhetoric such as important donations. However, Grewal says the government’s response is troubling.
However, Grewal notes, the First Amendment is more powerful than that. He points out that the government cannot simply require law-abiding Americans to go exercise their liberty elsewhere with far less personal protection.
On his final point, Grewal adds that unlike the government’s suggestions, plaintiffs are not asking for special rules for cryptocurrencies. Grewal summarizes that plaintiffs are only asking that the government meet basic legal requirements written by Congress, along with access to a privacy tool that protects legal purchases and donations.
The publication Paul Grewal Sides With Plaintiffs In US Treasury vs. Tornado Crash Issue first appeared in Coin Edition.