Plaintiffs in a lawsuit against the U.S. Treasury over its ban on crypto privacy mixer Tornado Cash have asked for a ruling on some factual issues of the case.
The lawsuit, filed by six individuals in September, received financial backing from major U.S.-based crypto exchange Coinbase. The complaint contests sanctions imposed on Tornado Cash by the Treasury Department’s Office of Foreign Assets Control (OFAC).
A few months ago, Coinbase backed a legal challenge to sanctions imposed by the US govt against Tornado Cash. Today the plaintiffs filed a motion for summary judgment, asking the court to reopen TC for all. Their arguments are simple but powerful. 1/10 https://t.co/xSngWKxM3x
— paulgrewal.eth (@iampaulgrewal) April 5, 2023
A summary judgment calls for a judge to rule on aspects of the case, typically when the party involved has no prospect of successfully defending a claim. If granted, Wednesday’s motion could see an official ruling on two of the three accounts raised.
The plaintiffs argued that the OFAC violated the right to free speech clause in the U.S. Constitution by banning an open-source decentralized protocol like Tornado Cash.
They further argued that immutable smart contracts cannot be labeled “property” and that OFAC had exceeded its statutory authority in actioning the sanctions.
The OFAC sanctioned Tornado Cash in August, alleging it was used to launder more than $7 billion worth of cryptocurrency since 2019, including $455 million stolen by the North Korean state-sponsored cyber crime unit Lazarus Group.
“To ban all uses of Tornado Cash is akin to banning the printing press because a tiny fraction of users might publish instructions on how to build a nuclear weapon,” read the motion.
(In an episode of The Chopping Block, Haseeb Qureshi, Tom Schmidt, Tarun Chitra and Laura Shin discuss why regulators are going after Tornado Cash).