Coinbase Chief Legal Officer: Court rules that Tornado Cash’s smart contracts are not sanctioned “property”

Odaily News Paul Grewal, Chief Legal Officer of Coinbase, said in a post on X: "Privacy rights win. Today, the U.S. Fifth Circuit Court ruled that the U.S. Treasury Department's sanctions on Tornado Cash smart contracts are illegal. This is a historic victory for cryptocurrencies and all those who care about defending freedom. Coinbase is proud to help lead this important challenge. Now these smart contracts must be removed from the sanctions list, and Americans will be allowed to use this privacy protection protocol again. In other words, the government's overreach will not be able to continue. No one wants criminals to use encryption protocols, but Congress did not authorize the complete blockade of open source technology because a small number of users are bad guys. These sanctions expand the power of the Treasury Department to an unrecognizable extent, and the Fifth Circuit Court agreed. Specifically, the court ruled that while the Treasury Department has the power to take action against 'property', the open source, immutable smart contracts at the core of Tornado Cash cannot be owned by anyone and therefore do not belong to the sanctioned 'property'. We thank the court for its careful consideration of this matter. Looking forward, Coinbase will spare no effort to advocate for clear and fair rules to promote innovation in the United States and abroad."