On the second day of Trump’s presidency, the US District Court for the Western District of Texas overturned sanctions imposed on Tornado Cash by the US Treasury Department’s Office of Foreign Assets Control (OFAC). the to ruleReleased on January 21, 2025, it was celebrated as a major victory in developing more innovation-friendly regulations for privacy-preserving blockchain technology.
After Silk Road, the cryptocurrency community is looking forward to the cash tornado issue
Tornado Cash, a decentralized cryptocurrency mixing protocol, was sanctioned by OFAC in August 2022 over allegations that it facilitated illicit transactions, including money laundering, for the North Korean cybercrime group Lazarus. According to reports, the notorious group allegedly transferred more than $455 million worth of stolen digital assets through the protocol.
Following OFAC’s approval, six Tornado Cash users filed an appeal, arguing that the agency had exceeded its legal authority. Their appeal, filed on November 26, 2024, asserted that the immutable smart contracts used by Tornado Cash do not constitute “property” of any national or foreign entity. “Office of Foreign Assets Control has exceeded its powers established by Congress,” the court’s ruling said.
Despite this legal victory for Tornado Cash, the platform’s developer, Alexei Burtsev, remains in detention. In May 2024, Dutch judges at the Court of Appeal in ‘Hertogenbosch found him guilty of money laundering, sentencing him to five years and four months in prison.
During his trial, Burtsev said he should not be responsible for how users use Tornado Cash’s decentralized protocol. However, the court ruled that he and his co-founders could have taken additional measures to mitigate the abuse.
However, under the Trump administration, the voices in favor of Tornado Cash creators have become louder. “Tornado Cash itself won an important case today,” said Vitalik Buterin, one of the founders of Ethereum. He has raised his voice against a system that “unfairly” punishes innovators, including Ross Ulbricht, who ran Silk Road, the dark web marketplace.
He left no man behind.@rsstormsf and @alex_pertsev the next.
Tornado Cash itself won an important case today:https://t.co/ceF9IKlllC https://t.co/zg69SmZY8K
— Vitalik.eth (@VitalikButerin) January 22, 2025
However, Donald Trump fulfilled his campaign promise, signing a full and unconditional pardon for Ross Ulbricht. Ulbricht was convicted in 2015 in New York in a drug and money laundering conspiracy and sentenced to life in prison. Vitalik said that after his release, Alex Burtsev and Roman Storm will be next, saying “no one is left behind.”
Also Read: Vitalik Defends Ethereum Foundation Leadership Amid Online Hate
