Coinbase has funded a lawsuit against the US Treasury Department and other government authorities in response to the move to sanction the crypto mixing tool.
Users Sue the Government Department
Six Tornado Cash users have filed a complaint against Treasury Secretary Janet Yellen and several senior government officials, as well as the Treasury Department, over their decision to penalize the crypto mixing service in August. The plaintiffs include Coinbase workers and other Ethereum users such as Preston Van Loon, who claims that the sanction is preventing him from accessing Ethereum assets placed with Tornado Cash worth thousands of dollars.
He tweeted on Thursday,
“Today I joined five other plaintiffs in challenging the U.S. Treasury’s and OFAC’s sanctions against Tornado Cash, a piece of software running on Ethereum. I did not take this decision lightly. Code is speech and free speech is a constitutional right worth protecting.”
According to the lawsuit, the government lacks the ability to censure Tornado Cash since the motion infringes the free speech and property rights of all American residents under the US Constitution.
The CEO of Coinbase Speaks Out
According to the 20-page complaint filed in federal court in Texas, the sanction jeopardizes the ability of law-abiding Americans to conduct financial transactions freely and privately.
Coinbase CEO Brian Armstrong issued a statement on the topic, stating that the lawsuit has asked the court to remove Tornado Cash from the US sanctions list.
“In this case, Treasury went much further and took the unprecedented step of sanctioning an entire technology instead of specific individuals…there are legitimate applications for this type of technology and as a result of these sanctions, many innocent users now have their funds trapped and have lost access to a critical privacy tool.”
The Future of Open Source Technology Is at Stake
Tornado Cash, a popular mixing tool that can disguise crypto transactions, has been sanctioned by the US Treasury Department. According to the official announcement, the program was deliberately utilized by money launderers and other hostile actors (such as the North Korean cyber group Lazarus) to siphon off millions of dollars.
The industry is watching the case with bated breath since the verdict will determine the future of open-source code and decentralization technologies, as well as how much authority the government has over them. Because cryptocurrencies and blockchain technology are founded on decentralization, the conclusion could have long-term consequences for the business.