The U.S. District Court for the Western District of Texas has dismissed a lawsuit by users of crypto-mixer Tornado Cash who claim the U.S.
Treasury Department overstepped its authority by imposing sanctions on the service.
Judge Robert Pitman dismissed a lawsuit filed by six Tornado Cash users and two employees of cryptocurrency exchange Coinbase seeking summary judgment against Tornado Cash.
The judge noted that the service has a property interest in its smart contracts. In this regard, the agency has put the cryptocurrency mixer on the so-called “blacklist”.
OFAC believes Tornado Cash may have been used by North Korean hacker group Lazarus Group to launder funds stolen from decentralized platforms.
The move prompted an immediate reaction from the crypto community, with nonprofit Coin Center also filing a lawsuit against the U.S. Treasury Department.