The Office of Foreign Assets Control (OFAC) added Tornado Cash to its ‘Specially Designated National or Blocked Person’ list in November of last year. Coin Center subsequently filed a lawsuit against Janet Yellen for the sanctions that OFAC applied against the crypto tumbler but that lawsuit has now been dismissed.
Coin Center, in its suit, maintained that the addresses associated with the core non-upgradeable smart contracts that made up Tornado Cash weren’t appropriate targets for the sanctions.
One argument centered around whether or not the entity had sacrificed any interest in these contracts because they couldn’t be altered at this point. However, the court found that “TORN holders still have an indirect beneficial ‘interest’ in the use of the core software tool and the service as a whole because that increases the value of the TORN.”
The court likewise rejected the argument that there was First Amendment protection for Tornado Cash, finding that “the designation of Tornado Cash does not preclude Plaintiffs…from spending money or donating money for political ends, nor does it preclude organizations from accepting anonymous donations.”
Neeraj Agrawal, who leads communications for Coin Center, took to X to express disappointment and explain that the firm intends to appeal the decision.
This case has represented a touchstone for transactional privacy advocates who worry that Tornado Cash is just the next step in a steadily increasing financial panopticon.