A group of Tornado Cash users has filed an appeal in the U.S. Court of Appeals for the Fifth Circuit after a Texas federal judge upheld the decision of the United States Treasury Department to add the cryptocurrency mixer to its list of sanctioned entities.
Plaintiffs, including Joseph Van Loon, Tyler Almeida, and others, argue that the Treasury exceeded its authority in sanctioning Tornado Cash transactions, claiming it stretched its authority "beyond recognition."
The appeal contends that Tornado Cash's smart contracts, identified in the lawsuit, are "immutable and ownerless," and do not meet the Treasury's regulatory definition of "property" subject to sanctions. The legal move challenges the Treasury's definition of "interest," asserting that Tornado Cash has no "legal, equitable, or beneficial interest" in users' smart contracts.
This development follows an August decision by a Texas federal judge, and the appeal marks the latest step in a lawsuit initiated by the users in September 2022. Coinbase chief legal officer Paul Grewal expressed support for the plaintiffs in a Twitter thread, highlighting the careful consideration the appellate court would give to the filing. Coin Center, a crypto advocacy group, has also filed an appeal in the U.S. Court of Appeals for the Eleventh Circuit after losing its own lawsuit against the U.S. Treasury over Tornado Cash in October 2022.
U.S. authorities have pursued criminal charges against Tornado Cash co-founders for conspiracy to commit money laundering and other offenses.
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