Court Lifts Tornado Cash Sanctions

Texas Court Overturns Treasury Sanctions on Tornado Cash

• The U.S. District Court for the Western District of Texas ruled against Treasury’s sanctions on Tornado Cash.
• Tornado Cash was sanctioned in August 2022 for allegedly laundering $455 million linked to North Korea’s Lazarus Group.
• The court stated that immutable smart contracts cannot be classified as “property” under IEEPA.
• The case will return to the district court for further proceedings following this ruling.
• Roman Storm, a co-founder, faces money laundering charges in New York related to Tornado Cash operations.

The Texas court determined that Tornado Cash’s immutable smart contracts are not “property” as defined by IEEPA, impacting Treasury’s regulatory reach. The case is set for further legal review.