The coinbase-backed legal challenge seeks to reopen Tornado Cash (TC) platform for all American citizens, as TC is a neutral tool.
Tornado Cash (TC) is a popular Ethereum blockchain-based crypto-mixing platform. In late 2022, TC was sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC), as this platform was used by money launderers to launder $7 billion between 2019 to 2022. The OFAC agency stated that they already warned the TC team to prohibit the engagement of bad actors on this platform but they failed.
On 6 April 2023, Paul Grewal, the chief legal officer at the Coinbase exchange, said that recently a court filing again challenged the OFAC sanction on TC.
Grewal confirmed that the legal challenge was backed by the Coinbase exchange and through the filing, the plaintiff pointed out four reasons, which favour unbanning the Tornado Cash platform.
Through the first argument, the plaintiff said that TC is an open-source software and more similar to a crypto wallet but not a person or group of people, so the US Ban on TC is not the right decision.
In the 2nd argument, the plaintiff acknowledged that US law may sanction property but here TC is not a property neither controlled by any person.
In the 3rd argument, the court filing pointed out that TC users also don’t control this platform and also its core 20 smart contracts are neutral tools.
Through the fourth argument, the plaintiff claimed that sanction on TC is stopping Americans from using TC to engage in socially valuable speech, just because some bad actors also used it.
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