Blockchain Association Criticizes US Treasury Tornado Sanctions In New Court Filing

Key Points:

• The Blockchain Association, a crypto advocacy organization based in Washington, D.C., has submitted a court brief in support of Coin Center’s appeal.
• It referred to the Treasury Department’s move to penalize Tornado Cash as unprecedented and illegal.
• The litigation was the advocacy group’s second against the Treasury Department.

In a recent amicus brief filed with DeFi Education Fund, the Blockchain Association termed the US Treasury Department’s move to penalize Tornado Cash unprecedented and illegal.

The Blockchain Association has submitted an amicus brief in support of Coin Center’s ongoing action against the Treasury Department and its sanctions inspector, the Office of Foreign Asset Control.

In action, Coin Center claims that the US Treasury Department’s broad restrictions against cryptocurrency mixer Tornado Cash damaged Americans and their ability to interact secretly on the Ethereum network.

“It’s critical to recognize that Tornado Cash is simply a tool – punishing the tool itself simply because it can be used by anyone, including bad actors, runs contrary to the values this country was founded upon,” Blockchain Association CEO Kristin Smith said in a statement.

Tornado Cash was sanctioned by the Treasury’s OFAC in August, claiming that North Korean hackers have laundered hundreds of millions of dollars in cryptocurrency via the mixer since its inception. According to the federal authorities, around 20% of Tornado Cash’s total transaction volume was linked to one or more hacks.

Crypto proponents, notably the Washington, D.C.-based policy group Coin Center, reacted angrily to the action, filing a lawsuit against the Treasury Department over the fines.

The litigation was the advocacy group’s second against the Treasury Department and the second against Treasury over its Tornado Cash restrictions.

“Blockchain Association stands with Coin Center, advocating for the responsible and lawful use of blockchain technology. Regulatory actions should only be targeted at bad actors who abuse this tool for illegal purposes,” Smith added.

Coinbase, a cryptocurrency exchange, is supporting yet another complaint against the government over the penalties. In that case, the Blockchain Association has also submitted an amicus brief.

Both cases contend that the government exceeded its jurisdiction by targeting software rather than individuals or entities, among other things.

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