Blockchain Association Sues OFAC Over Sanctions on Tornado Cash

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1700560325-treasury-3 — Source: US Department of Treasury

Blockchain Association, the crypto advocacy group, has filed an amicus brief with the US Office of Foreign Assets Control (OFAC).

The Association has criticized the agency’s decision to sanction crypto mixer Tornado Cash, pointing out the regulatory repercussions.

Per the brief filed on Monday, the Association argued that OFAC’s actions toward the privacy-protecting software Tornado Cash are “unlawful.”

“We argue that OFAC’s actions are unlawful, exceed statutory authority, and are arbitrary and capricious, running contrary to the Constitution.”

The official statement read that this is the first time OFAC has sanctioned computer software instead of individuals or entities. This amicus brief is the second filing following a district court brief filed in April.

Blockchain Association Defends Second Time

In the April brief, the Blockchain Association defended Tornado Cash describing it as simply a tool. The platform is a self-executing computer software protocol embedded in the Ethereum (ETH) blockchain.

Further, the software has no owner or operator, and is entirely decentralized unlike OFAC’s claims, it added. However, if OFAC succeeds in the sanctions, it would weaken the digital asset industry.

Blockchain Association Senior Counsel Marisa Coppel notes that the actions by OFAC are “dangerous,” exceeding their authority. The sanctions also jeopardize American’s right to privacy, she added.

“OFAC must see Tornado Cash for what it is: a tool that can be used by anyone. Rather than sanctioning a tool with a lawful purpose, OFAC should remain focused on the bad actors that misuse such tools.”

The OFAC sanctioned the victual currency mixer Tornado Cash on August 8, 2022, for allowing hackers to launder $7 billion. The agency accused the platform of failing to install sufficient controls to prevent it from laundering cash for bad actors.

Per the accusations, the laundered assets include $445 million hacked by the North Korean notorious hacker – Lazarus Group.