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Can Coin Center Overturn OFAC Tornado Cash Ban? A Battle for Crypto Autonomy

2 mins
Updated by Kyle Baird
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In Brief

  • Coin Center has stated that it is suing OFAC over its Tornado Cash sanction.
  • In June, the advocacy group filed a lawsuit against the Treasury for the contentious infrastructure bill.
  • Coinbase is also supporting a lawsuit against the sanction that features six plaintiffs.
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Coin Center, a non-profit organization focused on cryptocurrency policies, revealed that it is suing OFAC over its Tornado Cash sanction.

In a statement released on Oct. 12, Coin Center reiterated its crypto-forward mission, stating that Americans have the freedom to employ privacy mechanisms, and OFAC lacks the jurisdiction to censor a smart contract.

It argued, “Privacy is normal for a salaried employee, a charitable donor, even a celebrity, but privacy is not normal if you do these things on Ethereum unless you use Tornado Cash.”

The second lawsuit from Coin Center in 2022

Earlier in June, the advocacy group filed a lawsuit against the U.S. Treasury Department for “unconstitutional financial surveillance” through the contentious infrastructure bill.

This time around, the lawsuit makes four claims. Firstly, it noted, “Congress gave the president very specific powers when it passed the International Emergency Economic Powers Act upon which Treasury’s sanction rules are based: sanctions can block U.S. persons from transacting with a foreign person or majority foreign entity or the property of that person or entity.”

Secondly, it argues that the scope of sanction controls to transactions involving persons, entities, or their property is restricted by Treasury’s own rules and earlier presidential orders, making the tornado sanction “contrary to law.”

Thirdly, calling the Treasury’s actions “arbitrary and capricious,” Coin Center noted that the Treasury disregarded the collateral effects of its decisions in penalizing Tornado Cash instruments and failed to show any understanding of or reason for their significant departure from prior sanctions guidelines.

And lastly, the action states that the “American system relies on certain essential and self-evident rights,” including those to make private donations.

More opposition against crypto mixer sanction

The non-profit think tank emphasized that it “filed a lawsuit against the Treasury Department to keep privacy normal, to delist Tornado Cash privacy tools from sanctions, and to enjoin Treasury from enforcing against ordinary Americans exercising their self-evident and basic rights to privacy.”

The plaintiffs reportedly include Coin Center and groups of workers advocating privacy, donors, activists, and public figures.

BeInCrypto previously reported that Coinbase also supports a lawsuit against the sanction that features six plaintiffs, including several Coinbase employees.

In August this year, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) revealed that it sanctioned the token mixing platform, alleging it was responsible for $7 billion in illicit fund flows. The Treasury blacklisted and added the Ethereum (ETH)-based software to the Specially Designated Nationals list on August 8. Soon after, guidelines outlining how Americans can redeem their assets on Tornado Cash were published by OFAC.

Coin Center also stated that it “opposes Treasury’s extra-legal usage of its sanctions authority to strip U.S. persons of access to software tools that are necessary to protect our basic privacy needs as [we] go about [our] lives.”

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Shraddha Sharma
Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.
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