On January 21, the U.S. Fifth Circuit Court of Appeals overturned sanctions imposed by the Office of Foreign Assets Control (OFAC) in 2022 against the cryptocurrency mixer Tornado Cash.
The case now returns to the U.S. District Court for the Western District of Texas for further proceedings, taking into account the appellate court’s decision.
In its ruling, the panel of judges found that OFAC overstepped its authority and called the sanctions against the service “illegitimate.”
Despite the court victory, Tornado Cash developer Alexey Pertsev remains in custody on charges of money laundering. Figures within the crypto community hope the ruling could positively impact Pertsev’s legal case.
Following the news, TORN—the utility token of Tornado Cash—soared by 200% at its peak. As of this writing, it trades around $25, according to TradingView.
Context
- U.S. authorities allege that over $7 billion in illicit funds have been laundered through Tornado Cash, including at least $455 million linked to North Korean hacker collective Lazarus Group.
- In May 2024, a Dutch court found Pertsev guilty of laundering $1.2 billion and sentenced him to 64 months in prison.
- Additional money laundering and sanctions violation charges have been brought against Tornado Cash co-founders Roman Semenov and Roman Storm. In late 2024, Roman Storm sought reconsideration of a rejected motion to dismiss the case.
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