A recent ruling by a U.S. federal appellate court has lifted sanctions on Tornado Cash (TORN), a platform known for anonymizing cryptocurrency transactions. The court determined that the U.S. Department of the Treasury overstepped its authority by imposing sanctions on the protocol. It stated that Tornado Cash’s smart contracts cannot be classified as property under existing regulations.
Court Rules Treasury Exceeded Its Authority
Last year, the Office of Foreign Assets Control (OFAC) placed Tornado Cash on its sanctions list, claiming that North Korea’s Lazarus Group used the platform for money laundering. However, the appellate court ruled that such sanctions could not be applied under the International Emergency Economic Powers Act (IEEPA), concluding that the Treasury had overreached its authority.
Prominent crypto firms, including Coinbase, had challenged the sanctions in court. Coinbase’s Chief Legal Officer, Paul Grewal, hailed the court’s decision as a “historic victory for the cryptocurrency industry.” Grewal emphasized, “Government overreach has been checked, and U.S. citizens can now legally use Tornado Cash.” The ruling also underscored that controlling such technology falls under Congress’s legislative authority, not existing executive powers.
TORN Token Skyrockets
Following the ruling, Tornado Cash’s native token, TORN, saw an explosive surge in price. According to CoinGecko, TORN’s value skyrocketed by over 500%, surpassing $20 within hours. This marks a significant recovery for the token, which had plummeted below $8 last year amid regulatory pressures.
Analysts view the court’s decision as a pivotal moment, signaling a potential easing of regulatory pressure on the crypto industry. Many believe the ruling could set a precedent for similar protocols, paving the way for broader acceptance of decentralized platforms.
A Turning Point for Crypto Regulation
As highlighted by Dey There, this landmark decision not only boosts Tornado Cash but also raises critical questions about the balance of power between regulatory authorities and emerging technologies. It underscores the importance of clear legislative frameworks to govern innovations in the cryptocurrency space.
The ruling’s implications are expected to ripple across the industry, encouraging investors and developers to explore decentralized solutions with renewed confidence. The dramatic price action of TORN token exemplifies the impact regulatory clarity can have on market sentiment and investment opportunities.
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