Blockchain Association files support in suit to lift Tornado Cash sanctions

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The Blockchain Asso­ci­a­tion has thrown fresh sup­port behind six plain­tiffs suing the Unit­ed States Trea­sury Office of For­eign Assets Con­trol (OFAC) over its sanc­tions on the cryp­to mix­er Tor­na­do Cash.

In a Nov. 20 ami­cus curi­ae brief to a U.S. appel­late court, the cryp­to advo­ca­cy group argued OFAC’s deci­sion to sanc­tion the pri­va­cy pro­to­col was not only unlaw­ful but exceed­ed its statu­to­ry author­i­ty and was both “arbi­trary and capri­cious” — con­trary to the U.S. Constitution.

It’s the sec­ond ami­cus brief filed by the Blockchain Asso­ci­a­tion sup­port­ing a group of Tor­na­do Cash users appeal­ing a low­er court’s rul­ing that upheld OFAC’s deci­sion to add the cryp­tocur­ren­cy mix­er to its list of sanc­tioned entities.

Blockchain Asso­ci­a­tion senior coun­sel Marisa Cop­pel empha­sized in a Nov. 20 state­ment that OFAC needs to focus on sanc­tion­ing bad actors rather than out­right ban­ning tools, which she claimed it has no author­i­ty over.

“OFAC must see Tor­na­do Cash for what it is: a tool that can be used by any­one,” Cop­pel said. “Rather than sanc­tion­ing a tool with a law­ful pur­pose, OFAC should remain focused on the bad actors that mis­use such tools.”

“OFAC’s action sets a dan­ger­ous new prece­dent that dras­ti­cal­ly exceeds their author­i­ty and jeop­ar­dizes law-abid­ing Amer­i­cans’ right to privacy.”

In its brief, the Blockchain Asso­ci­a­tion sug­gest­ed OFAC should act with­in the bounds of the law by seek­ing approval from Con­gress to ban cryp­to mix­ers such as Tor­na­do Cash.

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“The prop­er rem­e­dy is to seek leg­is­la­tion from Con­gress that would pro­vide sup­ple­men­tal author­i­ty in the unique­ly decen­tral­ized dig­i­tal asset con­text — not to improp­er­ly stretch its exist­ing author­i­ties,”  it said.

“Such a pow­er-grab would be a slip­pery slope that could threat­en all man­ner of inter­net-based tools that have hereto­fore been freely available.”

The Blockchain Asso­ci­a­tion has long held that Tor­na­do Cash has no own­er or oper­a­tor and can func­tion auto­mat­i­cal­ly with­out human inter­ven­tion or assistance.

OFAC first sanc­tioned Tor­na­do Cash in August 2022. It alleged that indi­vid­u­als and groups had used the mix­er to laun­der more than $7 bil­lion in cryp­tocur­ren­cies since 2019, includ­ing the $455 mil­lion stolen by the North Korea-affil­i­at­ed Lazarus Group.

Cryp­to exchange Coin­base also backed the suit, pledg­ing to 

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