The lawsuit reads: “Tornado Cash is not a person, entity, or organization. The Tornado Cash software, including the smart contracts, consists of immutable open-source software code, which is not property, a foreign country or a national thereof, or a person of any kind.”
Six plaintiffs filed a lawsuit against the US Department of Treasury’s Secretary Jannet Yellen and other officials over the agency’s decision to sanction Tornado Cash and its services.
Earlier in August, the Department of Treasury’s Office of Foreign Assets Control (OFAC) blacklisted Tornado Cash, an Ethereum-based coin mixing tool, citing that a North Korean hacking team: Lazarus Group used the tool to launder over $7B crypto funds.
Following the OFAC Tornado Cash sanction, several exchanges announced they would block Tornado Cash-related services on their platforms.
Consequently, six plaintiffs, including Coinbase employees and a former Amazon engineer, sued the Department of Treasury, claiming the Agency has misused its power to blacklist a crypto mixer, in addition to violating constitutional rights of free speech.
The lawsuit states that Tornado Cash is a privacy tool with many legitimate applications in the crypto community. Moreover, the sanction imposed on Tornado Cash has caused financial harm to investors as their funds are still locked on its platform.
Coinbase backed the lawsuit to ensure the sanctions against Tornado Cash get reversed. The US-based crypto exchange stated that blacklisting open-source privacy tools such as Tornado Cash could harm cryptocurrency innovations. Coinbase’s CEO, Brian Armstrong, adds,
“At Coinbase, we’ve been fighting illicit activity since the very beginning, and while we share Treasury’s commitment to fighting crime, we believe this action harms innocent people and threatens the future of decentralized finance (DeFi) and web3 specifically.”
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