In early May, during a lawsuit on the legality of blocking the Tornado Cash cryptocurrency mixer, the US Treasury compared TORN token holders to al-Qaeda terrorists. [признана террористической организацией и запрещена в ряде стран]. Crypto enthusiast Chris Black drew attention to this.
US Treasury Department compares holding $TORN tokens to being a member of Al Qaeda.
wow. pic.twitter.com/9cj3De3DHZ
— Chris Blec (@ChrisBlec) May 18, 2023
IN case file the plaintiffs stated that OFAC could introduce targeted sanctions against illegal users of the service instead of banning all transactions with Tornado Cash. According to them, a narrow group of TORN token holders did not necessarily agree to participate in the management of Tornado Cash, so they should not fall within the reach of departmental sanctions.
However, officials argue that holders should be held accountable for the actions of the sanctioned entity.
“OFAC will never need, for example, to identify every al-Qaeda fighter in order to demonstrate that it is an organization that can be subject to sanctions,” the document says.
The Ministry of Finance also believes that TORN holders “own” immutable smart contracts, and this allows them to derive some benefit.
In addition, according to the department, there is no constitutional right to transfer funds using the preferred service when other methods are available.
“Those who wish to use Tornado Cash may choose to use other legitimate means of privately transferring funds, including traditional channels such as banking services,” the respondent said.
As a result of the hearings at this stage, the Ministry of Finance defended its right to sanctions against the mixer.
The plaintiffs’ response to the department’s objections must be submitted by May 24.
Recall that in August 2022, OFAC added to the sanctions list the site of the cryptocurrency mixer Tornado Cash, with the help of which, according to the agency, the attackers laundered more than $7 billion worth of cryptocurrencies. Over $455 million of them are associated with the activities of the North Korean hacker group Lazarus Group.
On May 20, 2023, unknown individuals seized control of the Tornado Cash governance mechanism and began withdrawing TORN tokens from the smart contracts of the protocol.
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