- Coinbase’s CLO wrote about the legal challenge to sanctions imposed by the US Treasury against Tornado Cash in a recent tweet.
- Paul Grewal says the plaintiffs’ points mark the government’s attempt to ban open-source software.
- Grewal concludes that plaintiffs are demanding their basic legal requirements as per the First Amendment.
In a recent series of tweets, Coinbase’s Chief Legal Officer Paul Grewal spoke about the legal challenge to sanctions imposed by the US Treasury against Tornado Cash. According to him, the reply brief which is seeking to lift these designations, filed by the plaintiffs is “worth a read.”
Grewal reports that the plaintiffs have made four points which all address the government’s attempt to ban the use of open-source software using a property sanctions statute.
Additionally, he reviews the four points in rest of this thread. The first argument states that sanctions imposed by the US Treasury against Tornado Cash depend on assuming that anyone who happens to hold the digital token TORN is a member of a legally-recognized entity called “Tornado Cash.” He says: That’s novel as a legal theory, and it’s wrong as a factual matter.
The second argument addresses the law stating that sanctions can only block “property.” Grewal insists that while the legal definition of property is something that can be owned, the open-source and immutable smart contracts at the core of the privacy software cannot be owned, controlled, or changed by any party.
Consequently, in the third argument, Grewal acknowledges that no one including the founders, developers, and the users who possess TORN in their wallets, has a property interest in the immutable smart contracts.
Meanwhile, the final argument cites that sanctioning Tornado Cash unconstitutionally burdened speech under the First Amendment. The Coinbase CLO recaps that the plaintiffs used the software to protect their privacy while engaging in core First Amendment speech such as important donations. However, Grewal says that the government’s answer is worrisome.
However, Grewal notes that the First Amendment is stronger than that. He remarks that the government can’t simply tell law-abiding Americans to go exercise their freedom in some other venue with far fewer personal protections.
In his final point, Grewal adds that in contrast to the Government’s suggestions, the plaintiffs are not asking for special rules for crypto. Grewal summarizes the plaintiffs are only asking that the government meet the basic legal requirements that Congress wrote, alongside access to a privacy tool that protects legal purchases and donations.
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