Cryptography policy non-profit organization Coin Center made the announcement today that it is getting ready to challenge the ban that the United States government has placed on Tornado Cash in court.
The advocacy group, with its headquarters in Washington, District of Columbia, stated on Monday that the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury exceeded its authority when it censured Tornado Cash the previous week, possibly violating constitutional protections.
On August 8, the OFAC added the Ethereum mixing software Tornado Cash to its list of Specially Designated Nationals to penalize it. The OFAC stated that criminal organizations have used Tornado Cash “to launder more than $7 billion worth of virtual currency since its establishment in 2019.”
A blockchain sleuthing firm called Elliptic found that just $1.5 billion of illegal cash had been moved through Tornado Cash, while the remaining use of the service was entirely genuine.
The executive director of the Coin Center, Jerry Brito, and the research director of the Coin Center, Peter Van Valkenburgh, wrote in a blog post,
“As we suspected, we believe that OFAC has overstepped its legal authority by adding certain Tornado Cash smart contract addresses to the SDN List. That 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.”
“We plan to collaborate with other organizations that campaign for digital rights to seek administrative remedies.” Brito and Valkenburgh wrote, “We are also now considering the possibility of mounting a challenge to this action in court.”
What is Tornado Cash?
Tornado Cash is a decentralized application (dApp) that encrypts Ethereum transactions, making it an indispensable instrument for Ethereum traders and users concerned about privacy.
However, according to the official statement released by the United States government, the program’s developers “repeatedly failed to impose appropriate controls aimed to stop it from trafficking money for malicious cyber entities on a routine basis even without basic measures to deal with its hazards.”
Now, anyone who interacts with it, including accepting cash from an account that has utilized the app, runs the risk of breaching the law and could face the consequences.
Coin Center is stating that the restriction and its repercussions are unfair. To better clarify its viewpoint, Coin Center today compared the sanctioning of Tornado Cash to the ban imposed on Blender.io.
Blender.io was banned for similar reasons. Blender.io is another program for mixing coins that the federal government banned in May this year. According to Coin Center, the prohibition makes perfect sense because Blender.io “is a firm or some such entity.”
In contrast to Blender.io, controlled by a single individual, the Tornado Cash software is completely decentralized and open-source so that anyone may participate in its development. The latest blog post states, “The Tornado Cash Entity, which most likely was responsible for deploying the Tornado Cash Application, has zero control over the Application at this time.”
“In contrast to Blender, the Tornado Cash Entity cannot select whether or not the Tornado Cash Application engages in mixing. Additionally, the Tornado Cash Entity cannot select which ‘clients’ to accept and which to reject.”