Tornado Cash’s native token, TORN, experienced a nearly 5% surge in value on Monday, reflecting investor optimism after a notable legal development in the United States. The Eleventh Circuit Court of Appeals in Atlanta has dismissed a lawsuit against the Treasury Department, a move that follows the Office of Foreign Assets Control (OFAC) lifting sanctions against the crypto mixer. This ruling, dated July 3, marks the effective end of a legal tug-of-war initiated by Coin Center, a prominent crypto advocacy group, which challenged the government’s authority to sanction Tornado Cash.
Legal Victory Spurs Market Reaction
The market responded swiftly to the court’s decision, with TORN’s price climbing to $9.67 from $9.16 earlier in the day. This reaction underscores the intricate dance between regulatory actions and market sentiment within the crypto sphere. According to Mark Hays, a financial analyst specializing in digital assets, “The dismissal is a significant win for decentralized finance advocates and highlights the judiciary’s role in shaping the boundaries of regulatory reach in crypto.” This sentiment echoes recent victories in other jurisdictions, such as Crypto Exchange Coinone’s win in South Korea, which also emphasized the judiciary’s influence in crypto-related legal battles.
The drama began when OFAC delisted Tornado Cash in March, a move compelled by another appellate court’s decision that deemed it illegal to sanction smart contracts. This legal backing was further solidified in April when a district court ruled that OFAC couldn’t renew sanctions against the crypto service. With these milestones, the latest appellate ruling was anticipated by some but still welcomed as a definitive closure to the legal saga.
The Path to Dismissal
Last month, Coin Center and the Treasury Department reached a rare consensus, jointly requesting the appellate court to vacate an earlier Texas district court’s ruling. This ruling had previously deemed OFAC’s actions unlawful. Their agreement pointed to different motivations: Coin Center sought to preemptively close the chapter before the Texas judgment became unappealable, while the government considered the rescission of sanctions by OFAC as rendering the appeal moot. The Eleventh Circuit’s decision to dismiss aligns with these strategic legal moves.
Peter Van Valkenburgh, Coin Center’s Executive Director, shared his thoughts on the resolution via X, expressing relief over the outcome. “This is the official end to our court battle over the statutory authority behind the Tornado Cash sanctions,” he noted. His remarks capture the sentiment among many crypto enthusiasts who view the case as a test of the balance between national security and innovation privacy.
Ongoing Challenges and Market Implications
Despite this legal victory, the U.S. government hasn’t closed its dossier on Tornado Cash completely. Criminal charges for money laundering remain pending against developers Roman Storm and Roman Semenov, with Storm’s trial slated to commence on June 14 in New York. These proceedings ensure that Tornado Cash remains under the spotlight, albeit in a different legal context.
The broader implications for the crypto industry are multifaceted. On the one hand, the legal clarity provided by these rulings could embolden other decentralized platforms to challenge regulatory decisions. However, the ongoing criminal cases serve as a cautionary reminder that the regulatory landscape for crypto, especially concerning privacy-focused technologies, remains fraught with potential pitfalls. This is reminiscent of the challenges faced by other tokens, such as XRP’s recent performance, which has been influenced by a trio of catalysts including regulatory developments.
As the legal dust settles, the question of how this will influence regulatory approaches to other crypto projects looms large. Will this embolden more projects to push back against perceived overreach, or will it lead to more sophisticated compliance strategies? While the future remains uncertain, there’s a palpable sense of cautious optimism among crypto stakeholders.
In the coming months, the focus will likely shift to how these legal precedents might be leveraged in future regulatory battles. For now, the market’s positive response to the dismissal is a testament to investors’ confidence in the resilience of decentralized finance models. Whether this trend holds or stumbles in the face of new challenges will be a narrative to watch closely as 2025 unfolds.
Source
This article is based on: TORN Spikes 5% After U.S. Appeals Court Okays End of Another Tornado Cash Lawsuit
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
