A new court ruling has revoked sanctions imposed by the U.S. government on cryptocurrency mixer Tornado Cash (TORN).
A recent filing by the New Orleans-based U.S. Court of Appeals for the 5th Circuit reversed its previous decision to impose sanctions on digital asset Tumblr.
“It is ordered and decreed that the judgment of the district court be reversed and the case remanded to the United States Court of Appeals for the District Court for further proceedings in accordance with the opinion of this court.”
Tornado Cache was first sanctioned by the Treasury Department’s Office of Foreign Assets Control (OFAC) after it was deemed a national security threat as it was believed to have been used to clean up stolen funds by hackers linked to the North Korean government.
Crypto mixers allow users to obfuscate the source of digital assets by mixing them with other coins from various sources and returning the amount invested to each user.
Last November, the court ruled that OFAC’s sanctions failed to accurately define the “property” included in the sanctions. He went on to say that if “property” means “capable of being possessed,” Tornado Cash and its smart contracts would be of such poor quality that sanctions would be illegal.
“Contrary to the department’s claims, immutable smart contracts are not services. Therefore, even considering OFAC’s regulatory definition, immutable smart contracts are not property because they cannot be owned and are not contracts or services.”
News of the landmark ruling sparked a massive rally that saw TORN rise 212% from $8.08 on January 21 to a high of $25.28. The token has since been re-tracked and is moving at $19.57 at the time of this writing.
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