Coinbase backs Tornado Cash users as they sue the Department of Treasury

ambcrypto.com:

Six users of the cryptocurrency mixer Tornado Cash havesued the U.S. Department of Treasury and other authorities. They sued the latter over the decision tosanction Tornado Cash as of August 2022.

The plaintiffs filed a lawsuit against the Department of the Treasury, the Office of Foreign Assets Control, and their corresponding heads. These included Treasury Secretary Janet Yellen and Office Director Andrea M. Gacki.

On 8 August, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) had sanctioned Ethereum blockchain-based cryptocurrency mixer Tornado Cash. This was for laundering more than $7 billion worth of virtual currency since its creation in 2019.

The office particularly underlined the theft of $455 million worth of crypto assets by the Lazarus Group. Tornado Cash allows users to put crypto assets into a pool alongside other users. Thus, making it difficult for anybody to trace the trajectory of an asset.

In their complaint filed in the District Court of Texas, the plaintiffs are suing the authorities over three counts.

Firstly, Tornado Cash cannot be added to the Specially Designated Nationals (SDN) list by the Department of Treasury. This is because it doesn’t meet the definition of a property, a foreign country, or a national thereof, nor a person. The Department had designated 44 Tornado Cash smart contract addresses to its SDN list.

Secondly, the decision violates the First Amendment (freedom of speech). Tornado Cash allows users to engage in important, socially valuable speech. They can make donations to support important, and potentially controversial, political and social causes. However, the sanction prevents them from doing so, thereby violating their rights.

Thirdly, Tornado Cash consists of