TORN Surges After Latest Ruling In OFAC's Tornado Cash Case

TORN Surges 418% As Federal Court Rules US Sanctions Against Tornado Cash Must Be Abandoned

Updated: 27 November 2024

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The TORN price surged over 418% in the last 24 hours after a federal court ruled yesterday that US sanctions against Tornado Cash must be abandoned.

TORN managed to break above $40 after the ruling, but has since pared gains to trade at $15.56 as of 2:39 a.m. EST, still up 337% from a day earlier. Along with the surge in price, the altcoin’s trading volumes also underwent a parabolic increase of 15,683%.

Tornado Cash Contracts Can’t Be Considered Property, Says Federal Court

Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the ‘property’ of a foreign national or entity,” according to the Nov. 26 ruling from the US Court of Appeals for the 5th Circuit.

The US Treasury’s Office of Foreign Assets Control (OFAC) therefore “overstepped its congressionally defined authority” when it blocked access to the smart contracts under the International Emergency Economic Powers Act, the ruling added.

The court did, however, acknowledge the difficulty of the situation, given that it involves a law that was established well before the world moved online.

OFAC sanctioned the crypto mixer platform in 2023, arguing that Tornado Cash was a popular tool for bad actors, including the North Korean Lazarus Group, to launder stolen funds. This latest ruling reversed a decision made by a lower court in favor of OFAC.

Tornado Cash Not Out Of The Woods Yet

Several crypto industry leaders said the federal court’s ruling is a major win for the digital asset space. Among them is Coinbase’s chief legal officer Paul Grewal, who referred to the development as a “historic win for crypto” in a Nov. 27 post on X.

Privacy wins. Today the Fifth Circuit held that @USTreasury’s sanctions against Tornado Cash smart contracts are unlawful. This is a historic win for crypto and all who cares about defending liberty. @coinbase is proud to have helped lead this important challenge. 1/6

— paulgrewal.eth (@iampaulgrewal) November 26, 2024

But while Consensys lawyer Bill Hughes also celebrated the ruling, he warned that it focused on smart contracts with no admin key and that it does not mean the rest of the crypto mixing platform is “out of bounds” for the Treasury Department and OFAC.