11262024trea.pdf (550 KB)

A U.S. appeals court ruled that the Treasury Department exceeded its authority when it sanctioned Tornado Cash under IEEPA. OFAC had blacklisted the cryptocurrency mixer after concluding it helped launder cybercrime proceeds, including more than $455 million stolen by the North Korea-backed Lazarus Group. The panel held that Tornado Cash immutable smart contracts were not property that OFAC could regulate because the code could not be owned, altered, removed, or controlled. The decision affects a sanctions tool used against laundering infrastructure tied to DPRK cryptocurrency theft, while leaving Congress to decide whether to update the law.