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Blockchain Association and DeFi Education Fund Rejects Unprecedented Sanctions on Tornado Cash


In a groundbreaking move, the Blockchain Association and DeFi Education Fund have joined forces to challenge the US Department of the Treasury’s controversial decision to sanction Tornado Cash, the leading privacy protection tool on the Ethereum blockchain. This unprecedented and unlawful act has sent shockwaves throughout the digital asset community, prompting these organizations to submit an amicus brief.

Tornado Cash, renowned for maintaining user privacy on the second largest digital asset platform, Ethereum, is a completely autonomous piece of software that runs on the blockchain without human intervention. However, the MOF’s sanctions stem from a fundamental misunderstanding of the technology and its functionality.

The Amicus brief emphasized the important role that Tornado Cash plays in protecting the privacy of users of digital assets, an issue that is especially important as adoption of digital assets skyrocketed. The survey shows that 20 percent of American adults already own digital assets, with an additional 29 percent planning to enter the market. It is important to note that while Tornado Cash may be misused for illicit purposes, its primary purpose is to be legitimate and socially valuable.

In addition, the brief argues that the sanctions imposed exceeded the statutory limits of the Office for the Control of Foreign Assets (OFAC), asserting that they resulted from arbitrary decision-making. The OFAC sanctions, implemented under Executive Order 13694, targeted Tornado Cash along with seven other entities allegedly involved in ransomware payments. Tornado Cash’s designation as a “Specially Designated National” restricts US individuals from transacting or providing services to the protocol.

Coin Center, a prominent crypto think tank, has been vocal in its criticism of the Treasury Department’s actions. This shows that Tornado Cash is an open source protocol that allows users to aggregate Ethereum transactions for increased privacy. Coin Center argues that similar to other technologies such as cash and the internet, Tornado Cash can be used illegally but primarily for legitimate purposes.

Additionally, plaintiffs Joseph Van Loon, Tyler Al-meida, Alexandra Fisher, Preston Van Loon, Kevin Vitale, and Nate Welch, supported by cryptocurrency exchange Coinbase, stressed that Tornado Cash is only software and is not sanctioned as a foreign citizen or person. . This argument challenges governmental authorities to impose sanctions on non-human entities.

The Blockchain Association and DeFi Education Fund is a respected non-profit organization committed to cultivating a favorable policy environment for the digital asset economy and driving innovation in blockchain technology and decentralized finance (DeFi). They seek to educate policy makers, regulators, courts and the general public about the benefits and properties of this technology.

This landmark case raised significant regulatory and constitutional concerns that reverberate throughout the blockchain ecosystem and digital asset economy. The results will set an important precedent for government regulation of blockchain and DeFi technologies. Courts must fully consider the strong arguments presented in the amicus brief to ensure fair and informed decisions that will shape the future of the industry.


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