Six Ethereum and Tornado Cash users filed a lawsuit against the US Treasury Department in the Western District of Texas. This was because of the sanctions against the cryptocurrency mixer.

solution for them OFAC In addition to the blacklisting of the service website, dated August 8, 2022, 39 Ethereum and 6 USDC addresses associated with it are “not in line with the law”. Users gave three arguments:

• Tornado Cash does not meet the definition of property, foreign country or citizen or person and cannot be listed. SDN;
• OFAC violated the First Amendment to the US Constitution;
• The ban on interacting with Tornado Cash violated legal procedures.

The lawsuit was sponsored by Coinbase. This was written by the Bitcoin exchange’s chief lawyer, Paul Grewal, in reference to a statement made by CEO Brian Armstrong.

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This morning Brian Armstrong shared why he financed and supported a challenge by six people (including two CB employees) against Coinbase’s Treasury Department and OFAC’s new sanctions against Tornado Cash-related open source software. https://t.co/8l5iKAjVZg

— paulgrewal.eth (@iampaulgrewal) September 8, 2022

“Today we are announcing that Coinbase is funding a lawsuit initiated by six individuals opposing US Treasury Department sanctions against Tornado Cash smart contracts and asking the court to remove them from the sanctions list.”

Armstrong noted that the exchange “takes a firm stance against illegal activity”. But according to him, the ministry took an “unprecedented step” by imposing restrictions on all technologies and exceeded its mandate.

“[…] “While we share the Treasury Department’s commitment to combating crime, we believe these actions harm innocent people and particularly threaten the future of decentralized finance (DeFi) and Web3.”

According to him, sanctions against Tornado Cash are not the best way to solve the problem. Armstrong added that OFAC’s decision hindered innovation.

“Now developers are worried that they are being threatened with liability for something they have no interest in and cannot control. At a time when we need to spur innovation, this kind of fear and uncertainty will do the opposite – making developers consider whether they’re putting themselves at risk by advancing the industry,” says the company president.

Recall that the industry’s human rights organization, Coin Center, said that OFAC overstepped its authority if there were sanctions against the mixer. Jess Powell, CEO of Kraken cryptocurrency exchange, said the regulator’s actions were unconstitutional and violated citizens’ right to privacy.

Congressman Tom Emer wrote a letter to US Treasury Secretary Janet Yellen requesting clarification on the Tornado Cash restrictions.

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