Coinbase supports new court action to overturn Tornado Cash ban

Six individuals backed by US-based cryptocurrency exchange Coinbase have filed a motion seeking to overturn the decision to sanction crypto mixer Tornado Cash. The motion is part of a broader determination to restore internet privacy rights for US citizens.

The motion was filed on April 5, 2023, in a Texas District Court. The plaintiffs have also moved to the US Office of Foreign Asset Control (OFAC) to settle the first two cases in the original complaint filed by Joseph Van Lonn in September 2022.

If granted, the judge will rule on some of the factual issues while leaving the rest for trial.


What the plaintiffs want

The motion claims that the OFAC overstepped its statutory mandate under the International Emergency Economic Powers Act (IEEPA) and also violated the free speech clause in the First Amendment of the US Constitution.

According to the plaintiffs, the OFAC broke the section of the IEEPA that allows the treasury to take action against a property in which foreign citizens or countries have an interest in. They argue that the provision only allows for the “pursuit of property-related action against a foreign national or person,” but does not apply to open-source software like Tornado Cash.

The six plaintiffs go further to state that the smart contracts used in Tornado Cash should not be considered property under IEEPA since the smart contracts cannot be owned. Part of the motion reads:

“An immutable smart contract is incapable of being owned, it is not property and the Department lacks authority under IEEPA and the North Korea Act to prohibit transactions with those smart contracts… No one has the right to alter them. No one has the right to delete them.”

Besides focusing on Tornado Cash which hackers have been using to mix stolen funds, the plaintiffs also argue that banning the open-source code violated the free speech clause.


Tornado Cash price (TORN)

TORN, the native token of Tornado Cash seems to be responding positively to the news since its price has surged by 7.33% today.

If the Plaintiffs were to win the case, it would be a huge boost not only to the Tornado Cash platform but also to its token, TORN, whose price prediction point to a long-term bull run.


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