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A federal court in Texas has ruled that the U.S. Treasury overstepped its authority by sanctioning Tornado Cash.
What’s the Scoop?
- Court Decision: The U.S. District Court for the Western District of Texas ruled that Tornado Cash's smart contracts are not subject to sanction under the International Emergency Economic Powers Act (IEEPA), as they cannot be owned.
- Legal Implications: The court reinforced that immutable, decentralized protocols cannot be classified as regulated assets under current U.S. laws, challenging the government’s ability to target open-source software
- Impact on Tornado Cash: In the wake of the ruling, Tornado Cash’s native token, TORN, surged over 200%, highlighting market optimism about the legal outcome
Bankless Take
This decision challenges the scope of government regulation in the crypto space, particularly around privacy tools like Tornado Cash. While this ruling could influence future legal battles, the broader fight for decentralized privacy tools remains far from settled.
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