Coin Center

Coin Center To Challenge The US Treasury’s Tornado Cash Sanctions

  • The crypto-focused policy think tank, Coin Center, will challenge the sanctions imposed by the the United States Treasury Department’s Office of Foreign Assets Control (OFAC) on Ethereum-based crypto mixer Tornado Cash.
  • Coin Center believes that the actions of the US authority “violates constitutional rights to due process and free speech.”

Leading non-profit crypto-focused policy think tank, Coin Center is all set to challenge the recent sanctions imposed by the United States Treasury Department’s Office of Foreign Assets Control (OFAC) on Ethereum-based crypto mixer Tornado Cash.

In a Monday’s blog post, the company outlined that it conducted a fuller legal analysis of the contradiction of sanctioning a smart contract. Coin Center’s executive director Jerry Brito and director of research Peter Van Valkenburgh opposed the OFAC’s actions by stating that the regulator treated autonomous code as a ‘person’ and thus exceeded its statutory authority.

“This action potentially violates constitutional rights to due process and free speech, and that OFAC has not adequately acted to mitigate the foreseeable impact its action would have on innocent Americans,”

they added.

The DeFi mixer’s operating smart contract, as well as a number of crypto wallets linked to the project’s coders, were the targets of the Tornado Cash sanctions. However, unlike other classified companies, a smart contract cannot legally challenge a designation made by the Treasury’s OFAC, according to Coin Center.

“This action sends a signal—indeed seems to have been intended to send a signal—that a certain class of tools and software should not be used by Americans even for entirely legitimate purposes,” 

The blog reads.

Coin Center made a very strong point that a smart contract that gets installed on the Ethereum Network in a certain way can automatically execute, with the person who installed it having no control over it. In the case of Tornado Cash, anyone can send ETH to it directly, and it will continue to operate according to code instructions as long as the Ethereum Network continues to operate. 

Notably, the Tornado Cash Entity, which presumably developed and deployed the smart contract, does not have a property interest in the application. It lacks both the legal power and—possibly more significantly—the physical ability to control that application. Coin Center has pointed out the inconsistency of labeling a smart contract a sanctionable entity.

The sanctions, which were announced last week, have been the subject of intense debate in the crypto community. Not only Coin Center but several big names in the crypto industry have expressed their unhappiness on various social media platforms. Even Ethereum co-founder Vitalik Buterin accepted that he himself had used Tornado Cash while donating crypto to Ukraine.

However, as BitcoinWisdom reported, Shark Tank star Kevin O’Leary thinks differently. He believes that Tornado Cash and similar services are hindering institutional adoption and messing with primary regulatory bodies and that their crackdown is necessary.

Parth Dubey Verified

A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.

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