US Treasury Can Sanction Tornado Cash Again, files ‘Moot’ Notice

The US Treasury recently dropped its sanctions against Tornado Cash, a popular cryptocurrency mixing platform. 

But instead of letting the legal case against it play out, they filed a “moot” notice last Friday in a Texas district court. 

Basically, this implies that the sanctions are gone, so there’s no point in this case anymore. If the court agrees, the case could be dismissed before a final ruling is ever made.

This also means there won’t be a binding court decision stopping the Treasury from sanctioning Tornado Cash again or even going after other crypto-mixing tools in the future. 

According to The Rage , this legal move could leave the door wide open for the Treasury to do it all over again.

This case started when plaintiffs sued the Treasury, arguing it overstepped its power by sanctioning Tornado Cash in the first place. The first court ruled against them, saying the Treasury was within its rights. But in November, the appeals court flipped the script, ruling that Tornado Cash shouldn’t fall under the International Emergency Economic Powers Act (IEEPA). That meant the sanctions were technically illegal.

After that, in January, the appeals court sent the case back to the Texas district court with instructions to rule in favor of the plaintiffs. The district court was supposed to issue a final ruling saying the sanctions shouldn’t have happened. But now, with the moot notice, the Treasury is trying to make sure that ruling never happens.

Tornado Cash was first sanctioned in August 2022 because the Treasury claimed it was being used for money laundering, especially by North Korean hackers. The government said billions of dollars flowed through the platform, hiding stolen funds.