Coin Center Files Suit Against Treasury Over Tornado Cash Ban
Crypto advocacy group Coin Center has slammed the US Treasury Department’s Office of Foreign Asset Control (OFAC) with a lawsuit. The think tank cites the Treasury’s blacklist of privacy protocol Tornado Cash as the reason for the suit.
According to the filing, Coin Center claims the ban was harmful to US-based users and stood in the way of private transactions on the Ethereum network.
Coin Center Shares Privacy Concerns
On October 12, Coin Center filed a lawsuit against the Treasury in the U.S. District Court for the Northern District of Florida. Other plaintiffs include crypto user David Hoffman, an unnamed human rights advocate referred to as John Doe, and software dev, Patrick O’Sullivan. Meanwhile, the Defendants in the suit are the OFAC, Treasury Secretary Janet Yellen, and OFAC director Andrea Gacki.
The goal of the suit is to dismiss Tornado Cash’s blacklist status. The Coin Center filing highlighted several concerns relating to the ban. However, it first explained that Tornado Cash does have legitimate functionality. The filing went over Ethereum’s workings, covering its use of a transparent public ledger and how users were left vulnerable.
KYC & Audit Solutions!
SolidProof
According to the complaint, without a privacy tool strangers could track private associations and stalk intimate relations. Furthermore, crypto users with large holdings are liable to become the targets of malicious actors.
Coin Center’s legal team stressed in the filing that crypto users employed privacy tools such as Tornado Cash to protect themselves. Following the OFAC ban, however, this was no longer possible as users protecting their privacy, the filing claimed, are now criminals.
Sanctions Could Hamper Donations
The suit cited an incident involving the plaintiff, Hoffman, to illustrate the importance of the privacy protocol. An anonymous user “dusted” the New-York based investor, that is they sent him a small quantity of ETH from Tornado Cash. Hoffman, of course, could not restrict the transfer and was forced to interact with Tornado Cash addresses despite the sanctions.
So the criminalization of Tornado Cash empowered someone else to implicate Mr. Hoffman and force reporting obligations on him by causing him to receive an asset from a sanctioned entity,” the filing stated.
Coin Center also noted that private donations to unpopular causes could be publicized and thus invite negative responses.
Doe who is a US resident is an example of this. The plaintiff has crypto contributions to aid Ukraine in its conflict with Russia. However, without a privacy platform to mask transactions, Russian officials could spot his pro-Ukraine efforts, possibly placing him at risk.
The advocacy group also cited its donors’ wishes to keep their transactions private. Indeed the sanctions might mean fewer contributions to the advocacy group, the suit noted.
OFAC Overstepping Legal Boundaries
Since Tornado Cash’s ban in August, Industry participants have protested against the sanctions, pointing out that software bans are not the usual move for the OFAC. The complaints have also highlighted Tornado Cash’s lack of a central operator.
In a blog post, the advocacy group criticized the OFAC for overstepping its legal authority. The Coin Center team shared plans to work towards administrative relief for persons affected by the ban. Having now filed a lawsuit against the treasury, Coin Center is moving forward with those plans.
Coin Center’s lawyers are working to see the court declare the platform’s criminalization null. They have also requested compensation for funds they have spent toward the case and “any other relief that the Court deems just and proper.”
price
price change
BUY NOWNotably, this is not the first Treasury suit with ties to the sanction. Crypto exchange Coinbase filed a suit in August also accusing the OFAC of exceeding its legal authority by blacklisting “open-source software project.”
Comments
Post a Comment