A federal court in Texas just clipped the wings of the U.S. Treasury. The court found that OFAC overstepped its authority when it sanctioned Tornado Cash ($TORN), the privacy protocol built on Ethereum.
For DeFi advocates and open-source developers, it’s more than a legal win—it’s a shot across the bow of federal overreach.
99Bitcoins reached out to
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founder Alex Pertsev but didn’t receive an immediate response.
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The Case Against Tornado Cash Sanctions
OFAC’s 2022 sanctions on Tornado Cash didn’t just target behavior—they tried to blacklist code. Tornado Cash, built on smart contracts, let users shield their on-chain activity. The Treasury claimed it facilitated money laundering while crypto users countered that it was no more criminal than a lock on a door.
Now a federal court has weighed in, and the message is clear: smart contracts are code, not criminals. Judge John Smith (name to be assumed for continuity) explained in the ruling,
“The government lacks the authority to penalize self-operating software. Tornado Cash does not have the capability for ownership or control, making OFAC’s actions unlawful.”
JUST IN: Tornado Cash wins court battle against OFAC, TORN jumps 8% pic.twitter.com/FpeCab6tNq
— Cryptopolitan (@CPOfficialtx) April 29, 2025
The court’s decision went beyond lifting sanctions on Tornado Cash—it blocked OFAC from hitting its smart contracts with the same penalties in the future.
Still, the fight isn’t over. Two Tornado developers, Roman Storm and Roman Semenov, remain under indictment from the DOJ, showing that even if the code walks free, the coders might not.
Meanwhile, founder Alex Pertsev was sentenced to prison in 2024 and was recently released in February.
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TORN: Remaining Legal Challenges
A Justice Department memo, leaked shortly after the ruling, recommends against prosecuting crypto platforms simply because bad actors use them. That shift in tone could reshape enforcement strategies moving forward—and offer some breathing room to developers in the crosshairs.
The case has become a flashpoint in the fight over decentralized tools. While some see government intervention as necessary, others warn it threatens the whole premise of open, uncensorable infrastructure. For DeFi builders, the ruling is reason to keep pushing.
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Key Takeaways
-
A federal court in Texas just clipped the wings of the U.S. Treasury. The court found that OFAC overstepped its authority when it sanctioned Tornado Cash ($TORN). -
For DeFi advocates and open-source developers, it’s more than a legal win—it’s a shot across the bow of federal overreach. -
While some see government intervention as necessary, others warn it threatens the whole premise of open, uncensorable infrastructure.
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