Lawyers from Coin Center contend that Tornado Cash is not considered property

Coin Center is currently in the midst of a legal battle regarding the status of Tornado Cash. The United States district court for Northern Florida ruled that Tornado Cash creates indirect benefits for foreign individuals and entities that could potentially be subject to sanctions from the Office of Foreign Assets Control (OFAC). In response, Coin Center is appealing this decision, with their legal counsel, Jeffrey S. Hetzel, arguing that there is no foreign property involved in their plaintiffs’ transactions. Hetzel emphasized that the software used is non-proprietary lines of code that cannot be owned, controlled, or altered by anyone on the planet.

The United States government, on the other hand, asserts that the price appreciation of the Tornado Cash token, TORN, directly benefits token holders. They also claim that withdrawal fees serve as accrued benefits for the protocol’s founders.

This legal dispute dates back to 2022 when the United States Treasury Department sanctioned over 40 wallet addresses allegedly connected to Tornado Cash for their involvement in money laundering and illicit transactions totaling around $7 billion. Coin Center then stepped in to file a lawsuit on behalf of U.S. residents who used Tornado Cash for privacy reasons, arguing that OFAC and the Treasury had overstepped their authority by sanctioning the service, which, according to Coin Center, was being used lawfully by their clients.

Following the sanctions, the Treasury Department clarified that publishing or replicating the Tornado Cash code online does not breach any sanctions. They also encouraged individuals who had used the service before the sanctions to apply for an OFAC license, assuring that non-illicit transactions would be approved.

In conclusion, the legal battle over Tornado Cash continues, with both Coin Center and the United States government presenting their arguments about the nature of the transactions and benefits associated with the use of Tornado Cash. Stay tuned for updates on this issue as it unfolds.