US Treasury Drops Sanctions on Tornado Cash

The US Treasury recently lifted sanctions against the crypto mixer Tornado Cash. On Friday, the Treasury filed a notice stating that a Texas district court case is now considered “moot” before a final judgment can be issued.

This “moot” notice indicates that the case has lost its practical significance due to the removal of sanctions against Tornado Cash. Consequently, the Texas District Court may choose not to issue a final judgment and may dismiss the case entirely.

Reports suggest that if this occurs, there will be no binding court order preventing the Treasury from re-imposing sanctions on Tornado Cash or similar software in the future.

Read more: OFAC ‘overstepped’ on Tornado Cash sanctions, court orders reversal

Plaintiffs initiated the case against the Treasury, claiming that the agency had overstepped its authority in sanctioning Tornado Cash on grounds of money laundering.

The plaintiffs lost the initial ruling and appealed the decision. Last November, the appeals court determined that the district court acted unlawfully, stating that Tornado Cash should not be subject to the International Emergency Economic Powers Act.

In January, the appellate court directed the case back to the Texas district court, instructing it to grant the plaintiffs’ motion for partial summary judgment. However, with the sanctions now lifted, the “moot” notice could prevent this judgment from ever being issued.