Tornado Cash Civil Decision Limits the Reach of Treasury Department’s Actions

A federal District Court dismissed the civil challenge brought in Van Loon v. Department of the Treasury, which argued the Treasury Department overstepped by placing the Tornado Cash open-source project on the sanctions list. EFF had filed an amicus brief urging the court to require the Treasury Department to follow strict First Amendment limits, but the court did not find that the government had violated the First Amendment. In interpreting the sanction, the court said it blocks only transactions in property Tornado Cash holds an interest in, such as smart contracts, and that developers may lawfully analyze the code and teach cryptocurrency concepts with it, but cannot execute it to conduct transactions. EFF said it was disappointed the court did not conduct a full First Amendment analysis but found the ruling gives coders some relief.