She owns the Blockchain Association and the DeFi Education Fund foot A friend’s brief called the US Treasury’s decision to sanction Tornado Cash “unprecedented and illegal”.
Until the OFAC imposed the sanctions, Tornado Cash was the most popular privacy protection tool on Ethereum, the world’s second largest digital asset platform. The software is a self-executing computer program published on the Ethereum blockchain, and runs automatically without any human intervention or assistance.
The Blockchain Association is taking over the US Treasury due to the cash hurricane sanction
The filing argues that the decision to penalize Tornado Cash reflects a fundamental misunderstanding of the program and its workings. The protocol was the most popular privacy protection tool on Ethereum until OFAC imposed sanctions.
Siddique’s feed highlights the importance of Tornado Cash as a tool for protecting the privacy of digital asset users. It argues that Americans are using digital assets more than ever before, with 20 percent of American adults owning digital assets and 29 percent planning to buy or trade digital assets.
The brief also notes that software like Tornado Cash can be misused for illegitimate purposes but is used primarily for legitimate and socially valuable reasons. The submission further alleges that the sanctions exceed OFAC’s legal authority and result from “arbitrary and capricious decision-making.”
OFAC sanctioned Protocol on November 18, 2021, along with seven other entities, for their alleged involvement in facilitating ransom payments. OFAC has designated Tornado Cash as a “private citizen” (SDN), which means that US persons are generally prohibited from entering into transactions with the protocol or providing services to it. Tornado Cash was sanctioned under Executive Order 13694, which targets malicious cyber activities of individuals and entities.
As reported by Bitcoinist, the Crypto Coin Center think tank has been one of the most vocal critics of the US Treasury Department’s decision to sanction Tornado Cash. Coin Center argued that the penalties imposed on Tornado Cash were misleading and could have far-reaching consequences for the cryptocurrency industry.
Moreover, Coin Center highlighted that Tornado Cash is an open source protocol that allows users to mix Ethereum transactions to protect their privacy. While the platform can be used for illicit purposes, Coin Center argued that the same can be said for many other technologies, including cash and the Internet.
Following the same line, cryptocurrency exchange Coinbase backed a group of plaintiffs who wanted to remove sanctions imposed by the US government on Tornado Cash. The plaintiffs, Joseph Van Loon, Tyler Almeida, Alexandra Fisher, Preston Van Loon, Kevin Vitali and Nate Welch, argue that the government cannot sanction Tornado Cash because it is “only software, and therefore not a national or foreign person.”
The Blockchain Association and DeFi Education are leading non-profit organizations dedicated to improving the policy environment for the digital asset economy and ensuring that blockchain technology innovation thrives. They work to educate policymakers, regulators, courts, and the public about the nature and benefits of blockchain technology and decentralized finance (DeFi).
The decision raises serious regulatory and constitutional questions with widespread implications for the blockchain ecosystem and digital asset economy. This case could set a precedent for how governments regulate blockchain technology and decentralized finance, making it imperative for the court to fully consider the arguments presented in the brief.
Featured image from Unsplash, chart from TradingView.com
