Advocacy group cites the move was unconstitutional
Coin Center is a crypto non-profit. The agency announced that it is going to challenge the U.S government about the ban on Tornado Cash. Tornado Cash is an app that works to conceal Ethereum transactions by making the origin point of the transaction obscure. The platform was recently blacklisted by the U.S Treasury and any American using it may face jail time. This means that even those that receive funds in their wallet from a wallet that had tokens washed in Tornado could potentially be breaking the law without knowing it.
The advocacy group is based in Washington D.C and stated that the U.S Department of the Treasury and its Foreign Assets Control or OFAC branch overstepped by black listing Tornado Cash. Coin Center states that the constitutional rights of the platform had been violated.
Recently OFAC sanctioned the Ethereum mixing app and added it to a Specially Designated Nationals list. This list made claims that the platform was being used by criminal groups including the North Korean Lazarus group which is the hacking group implicated in the massive over $600 million hack of Ronin Wallet, the wallet used by Axie Infinity. Tornado Cash had been used allegedly to launder more than $7Bn worth of crypto since 2019. There should be note that though the claim was $7Bn only $1.5BN can be proven as illicit funds at the moment.
In a statement on a blog post the Executive Director Peter Van Valkenburgh and Executive Directo Jerry Brito of Coin Center made a few comments:
“As we suspected, we believe that OFAC has overstepped its legal authority by adding certain Tornado Cash smart contract addresses to the SDN List, that this action potentially violates constitutional rights to due process and free speech, and that OFAC has not adequately acted to mitigate the foreseeable impact its action would have on innocent Americans.”
Coin Center intends to do the work with other digital rights advocates and are challenging the decision in court.’ The argument given by Coin Center is that the ban and its implications are unjust, they clarified by contrasting the blacklisting of Tornado Cash with the ban on Blender.io.
Blender.io was a different token mixing platform that was sanctioned by the Federal Government in May. Coin center stated that because Tornado is a decentralized app and not a company like Blender.io there is indeed a difference. The argument is that the Tornado Cash Entity cannot choose what the platform is used for and which customers to take or reject. It remains to be seen if this argument will be seen as valid or not.
