Coin Center Presses Charges Against the U.S. Treasury for Banning Tornado Cash

After the Coinbase crypto exchange, Coin Center has now also filed a lawsuit against the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) for unlawfully banning the crypto mixing service, Tornado Cash.

OFAC has banned the Ethereum mixing tool because it was frequently used for money laundering. The tool allows users to mix different transactions, which makes the transactions impossible to trace. Apart from normal users, cyber criminals, such as those from the North Korean organization Lazarus, have also been utilizing Tornado Cash.

Coin Center is a non-profit organization dedicated to crypto policy. The organization’s representative stated that OFAC has violated crypto users’ privacy rights, which are essential to blockchain ethos. Equally important is that if this ban is allowed to be set as precedent, OFAC would have the power to sanction even entire blockchains, such as Bitcoin or Ethereum, as it sees fit.

The lawsuit is furthermore based on the fact that OFAC only has the power to forbid residents of the U.S. to deal with foreign individuals or organizations. When it comes to Tornado Cash, such dealings are not involved.

Interestingly, the U.S. Securities and Exchange Commission (SEC) has a different view of Ethereum transactions, as most of Ethereum’s node validators are based in the U.S. Perhaps the two institutions should match their views before taking further steps.