Coinbase Backs New Filing in Support of Tornado Cash

UTC by Ibukun Ogundare · 3 min read
Coinbase Backs New Filing in Support of Tornado Cash
Photo: Depositphotos

According to the case filed on April 5 in a Texas District Court, the plaintiffs, with support from Coinbase, want the OFAC to settle the first two counts from its original complaint, which was filed last September.

Popular public listed exchange Coinbase is supporting the new class that seeks a reversal of the Tornado Cash ban. With this, the US Treasury is faced with a renewed legal case targeted at its move to sanction the crypto mixer. The motion to remove the Tornado Cash ban was filed by six individuals and backed by Coinbase. The crypto exchange’s CEO Paul Grewal also confirmed in a tweet that the company is backing the legal challenge to US-imposed sanctions. He explained:

“An initial point: anytime we give privacy to everyone, there is a risk that privacy could be abused by anyone. But the Constitution and laws of the country recognize that we don’t take away privacy from all just because of the unlawful acts of a few. The plaintiffs in this challenge are among the thousands of law-abiding Americans who want to protect their privacy online, but now can’t because of the government’s sanctions.”

In addition to the Department of the Treasury, the document targets the Office of Foreign Assets and two prominent names. They are “Janet Yellen, in her official capacity as Secretary of the Treasury; and Andrea M. Gacki, in her official capacity as Director of the Office of Foreign Assets Control” (OFAC).

Coinbase Supports New Court Action to Remove Tornado Cash Ban

According to the case filed on April 5 in a Texas District Court, the plaintiffs, with support from Coinbase, want the OFAC to settle the first two counts from its original complaint, which was filed last September. If the latest filing is granted, some issues would be ruled on while others would go into trial.

Grewal also highlighted the argument concerning the sanctions against Tornado Cash. He stated that the US authority has no right to sanction the crypto mixer because it is neither a foreign “national” or “person” but software. The CEO also referred to the law limitations as it only gives the government power to sanction people’s properties. According to the argument, properties have the capacity to be owned or controlled. “But no one can alter, delete, or otherwise control the 20 smart contracts at the core of the TC software.” Grewal added that smart contracts function without human control.

“If immutable open source software code can be sanctioned, it’s hard to see why the government can’t now ban any intangible concepts, which can’t be what Congress meant when it chose the word “property.”

Grewal argued further that the sanctions violate the First Amendment. The Coinbase CEO said the restrictions are not narrowly tailored and block Americans from using Tornado Cash because some bad actors also use the software.

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