The co-founder of Tornado Cash, Roman Storm, recently requested that his criminal charges be dropped by a federal judge in the US. This request comes after an appeals court ruled that the platform’s smart contracts should not have been sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC). According to Storm, the appeals court’s decision has a significant impact on his charge of conspiring to break the International Emergency Economic Powers Act (IEEPA), a key law in the US sanctions system. The court ruled that smart contracts are not the ‘property’ of a foreign entity and therefore cannot be blocked by the law. This decision led to a 700% rise in the price of TORN, the native token of Tornado Cash.
The court’s ruling on Tornado Cash’s smart contracts has also had a positive impact on other decentralized platforms, particularly privacy tokens, which have seen a bullish rally since the decision was made. Six plaintiffs have been involved in a civil case related to Tornado Cash’s punishment by the US Treasury Department. The Fifth Circuit stated that the Treasury Department was wrong to sanction the crypto mixer for executing transactions by North Korean-linked hackers and other national security threats. The court ruled that Tornado Cash’s smart contracts cannot be altered or eliminated and can be used by any individual, including sanctioned hackers. As a result, the Treasury’s OFAC erred in sanctioning the enterprise in 2022, and a lower court was directed to dismiss the penalties.
Roman Storm, who is accused of operating an unregistered money-transmitting business and participating in a money laundering conspiracy, argued that these charges should be dropped. He stated that Tornado Cash is not a financial institution and therefore cannot be involved in money laundering. Storm emphasized that Tornado Cash’s protocol was made immutable in May 2020, before the start of the alleged conspiracy. Crypto privacy supporters celebrated the court’s ruling, stating that automated smart contracts should be treated differently. They believe that crypto privacy is distinct from other developers and platforms and should be protected. Coinbase’s chief legal officer, Paul Grewal, supported Storm’s stance and described the ruling as a game-changer for blockchain technology.
Coinbase CEO Brian Armstrong also expressed his support for the court’s decision, stating that if the sanctions against Tornado Cash were allowed to stand, it would have a damaging impact on the entire crypto industry. The court’s ruling represents a significant legal victory for the crypto industry and highlights the importance of protecting privacy rights in the digital age. Despite the positive outcome for Tornado Cash, the price of its native token has experienced some volatility, declining from $19 to $9 within a short period. However, the court’s decision is expected to have long-lasting implications for the future of blockchain technology and decentralized platforms.
