Recently, the U.S.’s Fifth Circuit Court of Appeals declared the OFAC’s punitive measures on Tornado Cash unjustified. This choice undoes an earlier court decision outside this jurisdiction, which has important effects on rules about digital money like Bitcoin and Ethereum.
Legal Findings
The judicial committee declared that the enduring code-based agreements of Tornado Cash, crafted to protect confidentiality, do not constitute possessions of any non-national entity. language: Resultantly, these agreements are immune to IMF penalties in accordance with the IEEPA. The ruling highlighted that, despite OFAC’s wider applicability of “any property,” the entity still falls outside regulatory control due to its smart contracts not aligning with customary notions of property or business operations.
Market Response
In line with this groundbreaking judgment, the utility cryptocurrency linked to Tornado Cash, TORN, saw an immense price hike of roughly 870%, escalating from $3.60 to almost $35, and eventually settling near $16.54. This surge embodies market optimism about the future of decentralized finance and privacy-centric technologies
Background Context
They contend that the penalties deemed by the department are disproportionate since Tornado Cash is merely code, not a Even with an earlier directive in August 2023 endorsing OFAC, equating Tornado Cash’s admin DAO to an enterprise entity, this recent ruling signifies a crucial juncture for crypto governing rules.
“The prevailing legal disputes about Tornado Cash encompass allegations against its creators for financial deceit and infringements of embargo protocols within the United States, exacerbating the tale of this contentious application.”
