A D.C.-based policy organization sued the Treasury Department for overstepping its authority in August when it authorized Tornado Cash. Coin Center, a Washington-based policy organization, is suing the Treasury Department for sanctioning Tornado Cash.
This open source software can anonymize transactions on the Ethereum blockchain and can be used by Washington-based nonprofit Coin Center.
Treasury’s August sanctioning the transaction mixer “exceeded their statutory authority because Tornado Cash can be used to complete functions that don’t include ‘any property in which any foreign country has any interest’,” the co-plaintiffs claim in their brief. Coin Center is joined by an anonymous human rights advocate, a software developer who uses the Ethereum blockchain and David Hoffman, a manager of digital assets.
As a result of the sanctions, a second lawsuit has been filed against the Treasury Department.
Six individuals, including two Coinbase employees, filed a lawsuit against Coinbase last month.
Landmark cases involving blockchains could challenge Treasury’s decision to sanction the software. Coinbase and nonprofit lawyers supported by Coinbase are trying to convince the court that Treasury overstepped its authority when it targeted software rather than an individual or entity. In addition, Treasury has overstepped the statutory language and intent which gives Treasury the power to issue sanctions.
The suit states that Tornado Cash is used unilaterally by Americans to protect their property. Treasury’s “defiance” of this statutory element gives them an authority that would allow them to regulate the American economy virtually indefinitely.
Plaintiffs claim that the mixer is needed to protect their privacy rights.
Coin Center and other plaintiffs claim that if a user does not take proactive steps to protect their privacy, the ledger’s transparency permits strangers to track his private relationships and follow his individual activities. It invites the public to publish and to retaliate for private contributions to unpopular causes. It allows anyone to see if he has many assets, which could put him on the back foot.”
The suit was filed with the U.S. District Court, Northern District of Florida.