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The Blockchain Association and the DeFi Educational Foundation are the latest industry advocates to announce their support for Coin Center’s lawsuit against the US Treasury over its “illegal” sanctions against Tornado Cash.
On June 2, two cryptocurrency industry advocacy groups filed a joint amicus memo in support of Coin Center, arguing that US sanctions against cryptocurrency mixer Tornado Cash should be lifted.
1/ Today, my colleagues and I at @BlockchainAssn and our partners at @fund_defi filed an amicus brief in support of @coincenter‘s lawsuit against OFAC fighting against sanctions of the Tornado Cash software protocol.
https://t.co/mSZW7nVDOb pic.twitter.com/Y4CxjJtBrq
— Marisa Tashman Coppel (@MTCoppel) June 2, 2023
They called the sanctions imposed by the Treasury Department’s Office of Foreign Assets Control (OFAC) “unprecedented and illegal” and added:
“The OFAC sanctions are illegal. OFAC does not have the legal authority to impose sanctions on software such as Tornado Cash, and despite this, there is no factual basis in its decision that would make the sanctions legal.”
The associations have argued that Tornado Cash is software, and while OFAC has the legal authority to sanction people or property, it cannot sanction a decentralized protocol.
“The core software of Tornado Cash does not and cannot be owned by anyone,” they argued and claimed that OFAC had “invented” the “person”, so he had reason to sanction the cryptocurrency mixer.
5/ By sanctioning the Tornado Cash software protocol, OFAC infringes on the right to free speech and due process.
Americans who wish to engage in anonymous speech or association can no longer do so.
Nor did they have notice when they were blocked from accessing their assets.
— Marisa Tashman Coppel (@MTCoppel) June 2, 2023
The brief acknowledged that the protocol was being used maliciously for money laundering, mostly by hackers with ties to North Korea, but also pointed to other less nefarious uses, namely to enhance the privacy of the public Ethereum blockchain.
The groups argued that the sanctions should be declared illegal and their application should be legally prohibited by the courts.
Related: Control of Tornado Cash will be restored when voters approve proposal
In April, both groups similarly filed an amicus lawsuit in support of a nearly identical lawsuit filed by six individuals against the Treasury Department over its sanctions against Tornado Cash.
The lawsuit, filed in September, is backed by cryptocurrency exchange Coinbase, which also wants to lift the mixer ban.
The Treasury, however, has said that such cryptocurrency mixers pose a national security risk, and Tornado Cash has repeatedly failed to put in place controls to stop money laundering.