Michaela
Paul Grewal, Chief Legal Officer of Coinbase, has condemned the U.S. Treasury Department for ignoring a Fifth Circuit ruling that ordered the removal of Tornado Cash from the sanctions list. The dispute has reignited discussions on regulatory oversight and the evolving legal definitions of digital assets and smart contracts.
In a post on X, Grewal challenged the government’s reaction to the Fifth Circuit’s ruling, which stated that Tornado Cash’s immutable smart contracts do not meet the criteria for property under U.S. sanctions laws.
“Once again they want to ignore Congress’ explicit instructions and substitute [its] own view of the law on how to reinstate Tornado Cash,” Grewal wrote.
The U.S. Court of Appeals for the Fifth Circuit found that Tornado Cash’s immutable smart contracts do not meet the definition of “property” under the International Emergency Economic Powers Act (IEEPA). As a result, the court ruled that the platform should be removed from the Treasury’s Specially Designated Nationals and Blocked Persons (SDN) list.
“Immutable smart contracts are not “property” under IEEPA and Tornado Cash must be delisted. But rather than ordering OFAC to “set aside” the unlawful listing, as Section 706 of the APA compels, they say: “trust us” to do the right thing based on unspecified “national security concerns,” Grewel wrote.
Despite the ruling, Treasury officials stated in legal filings that while they intend to delist Tornado Cash, they require additional time to do so. They also clarified that the decision applies only to immutable smart contracts and does not affect the broader designation of Tornado Cash as a sanctioned entity.
The Treasury did not challenge the court’s ruling but argued that delisting Tornado Cash without further assessment could pose national security risks. Officials emphasized that a broader review is necessary before any final action.
“So they effectively have learned nothing. Once again, they urge the same kind of flouting of Congress’ unequivocal instruction that got them cross-wise with the Fifth Circuit in the first place,” Grewal wrote, adding that Coinbase plans to submit a reply reinforcing the court’s findings and challenging the Treasury’s position.
Read More
- Vitalik Buterin Donates $170K to Tornado Cash Developers’ Legal Defense
- Tornado Cash Available Soon? Court Ruling Overturns Sanctions
- Crypto Genius Buterin Fights For Tornado Cash Developers’ Freedom Amid Regulatory Crackdown
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
