EddieJayonCrypto
25 Mar 25
The US Treasury has lifted sanctions on Tornado Cash, a controversial cryptocurrency mixer previously accused of facilitating North Korean money laundering. However, Coinbase’s Chief Legal Officer Paul Grewal warns that this does not guarantee long-term freedom for Tornado Cash. Grewal argues that t...
The US Treasury has lifted sanctions on Tornado Cash, a controversial cryptocurrency mixer previously accused of facilitating North Korean money laundering. However, Coinbase’s Chief Legal Officer Paul Grewal warns that this does not guarantee long-term freedom for Tornado Cash. Grewal argues that the Treasury could impose similar restrictions in the future, as the reversal does not legally nullify existing claims. He urges the district court to grant plaintiffs’ motion for partial summary judgment to prevent potential Treasury overreach. The legal battle may set a significant precedent for decentralized finance platforms and privacy-focused technologies. The decision to delist Tornado Cash follows months of legal battles and criticism from the crypto community. The Treasury’s original sanctions accused the mixing service of enabling illicit transactions, particularly those tied to North Korea’s hacking groups. However, legal challenges led to increased scrutiny of the Treasury’s actions, ultimately prompting it to remove the restrictions. Despite this, Grewal argues that the Treasury’s actions attempt to bypass the court’s authority rather than a genuine acknowledgment of wrongdoing. He believes the reversal does not prevent the government from re-imposing sanctions whenever it sees fit. Grewal contends that the Treasury’s withdrawal does not legally nullify existing claims. He cites the voluntary cessation doctrine—a defendant’s decision to end a challenged practice does not necessarily moot a case unless it is proven that the practice will not be reinstated. The Coinbase exchange executive referenced past legal cases, including Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc. and FBI v. Fikre, to support his argument. These legal precedents demonstrate why the Treasury’s move to lift Tornado Cash sanctions does not guarantee lasting protection. Based on this, Grewal is urging the district court to take decisive action to prevent potential Treasury overreach. He insists that the court must grant the plaintiffs’ motion for partial summary judgment, which means formally invalidating the Treasury’s designation of Tornado Cash as a sanctioned entity. The removal of sanctions is a positive step for Tornado Cash users and the broader crypto community. However, the risk of renewed regulatory action looms large. The legal battle may not be over yet, and the case outcome could set a significant precedent for decentralized finance (DeFi) platforms and privacy-focused technologies. Grewal and other industry advocates continue to push for a clear judicial ruling to prevent the Treasury from arbitrarily sanctioning Tornado Cash again. "Yes we see this often with the 2a, they either drop the case or try to settle it so they don’t get a precedent they don’t want set," Badbrothers, a popular account on X, added. Badbrothers on X suggests a pattern where government agencies strategically avoid judicial rulings that could limit their authority.