- The plaintiffs in the Tornado Cash case filed a strong response to the U.S. Treasury.
- Coinbase supports the crypto mixer and aims to “preserve” Americans’ right to privacy.
- Tornado Cash co-founder Roman Storm has denied allegations of money laundering.
In the ongoing legal battle surrounding allegations of money laundering, Ethereum-based crypto mixer Tornado Cash has received support from crypto exchange Coinbase’s legal chief, Paul Grewal, who has stepped forward to “preserve” Americans’ right to privacy.
In a series of posts on social media platform X, Grewal highlighted Coinbase’s backing for a significant legal challenge aimed at protecting privacy rights.
Grewal acknowledged that in the Fifth Circuit Court of Appeals, the plaintiffs in the Tornado Cash case filed a strong response to arguments presented by the United States Treasury.
As per the filing, the Treasury needed to “establish that it had sanctioned an association made up of people who share a common purpose,” noted Grewal. He also pointed out a shift in the Treasury’s argument, stating:
In a surprising twist, Treasury seems to have abandoned its theory in the lower court for why all 1.5 million TORN holders, and the developers and founders of Tornado Cash, share a common purpose. Now it presents a new theory, but with all the problems of the last one.
Regarding the Treasury’s proposed sanctions, Grewal raised concerns about the interpretation of existing statutes, particularly in relation to open-source software code. He emphasized that such code is not classified as property, which poses challenges for the Treasury’s regulatory authority limited to “property” with foreign national interests.
Grewal argued that any attempt by the Treasury to regulate American citizens’ use of open-source software like Tornado Cash would necessitate congressional authorization. He referenced the Treasury’s recent appeal to Congress to address what it perceives as a regulatory gap concerning such software.
Notably, Tornado Cash co-founder Roman Storm denied allegations indicting him of conspiracy to commit money laundering of over $1 billion and violation of sanctions. He was released on bail last year in August.
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