Coin Center sues U.S. Treasury over Tornado Cash sanctions

The cryptocurrency advocacy group Coin Center filed a lawsuit against the U.S. Department of the Treasury and its OFAC. In its view, sanctions against the Tornado Cash mixer infringe Americans’ rights.

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Coin Center asserts that private individuals have legitimate grounds to use privacy-enhancing transaction tools. According to the filing, OFAC’s actions deprive them of the ability to “conduct legitimate activity with a certain degree of anonymity.”

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In addition to Coin Center, the filing names U.S. Treasury Secretary Janet Yellen and OFAC Director Andrea Gacki as defendants. The plaintiffs also include software developer Patrick O’Sullivan, Bankless co-founder David Hoffman, and an unnamed rights advocate.

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According to Hoffman, he received a small amount of funds from Tornado Cash addresses and is now required to file reports confirming that he is not engaged in criminal activity.

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I’m suing the Department of Tresury!

I got dusted from @TornadoCash, and now every year of my life I am FORCED file a report reaffirming that I’m not a criminal.

I don’t intend to waste my time like that.

David Hoffman vs Janet Yellen

Let’s dance pic.twitter.com/GVCMuzvpEH

— DavidHoffman.bedrock 🦇🔊🏴 (@TrustlessState) October 12, 2022

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“I’m suing the Department of the Treasury. I got dusted from Tornado Cash and now I am forced to file a report every year reaffirming that I am not a criminal. I do not intend to waste my time like that. David Hoffman vs Janet Yellen. Let’s dance,” he wrote.

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On 8 August 2022, OFAC added the Tornado Cash site, along with related 39 Ethereum- and 6 USDC-addresses to the sanctions list on suspicion of laundering more than $7 billion.

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On 12 August, Dutch authorities arrested the developer of the Tornado Cash service, Alexey Pertsev. The court kept him in custody until at least the end of October.

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The community criticised the regulator’s decision. Kraken CEO Jesse Powell called the sanctions against Tornado Cash unconstitutional, while TRM Labs analysts described it as a compliance challenge.

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U.S. Representative Tom Emmer also spoke on the situation. He argued that the restrictions on the mixer threaten privacy and innovation. He called on Yellen to explain OFAC’s actions.

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Earlier in September 2022, Coinbase backed a class-action suit against the U.S. Treasury over Tornado Cash sanctions.

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