U.S. Treasury: No Final Ruling Needed After Tornado Cash Removed from Sanctions List

The U.S. Treasury Department has argued that no further court ruling is necessary in the legal battle over its sanctioning of crypto mixer Tornado Cash, citing its recent removal of the platform and associated addresses from the sanctions list.

Tornado Cash was blacklisted in August 2022 by the Treasury’s Office of Foreign Assets Control (OFAC), which claimed the protocol was used by North Korea’s Lazarus Group to launder stolen cryptocurrency.

The move sparked backlash, prompting six Tornado Cash users, including Ethereum developer Preston Van Loon and supported by Coinbase, to sue the department, claiming the sanctions were unlawful.

On March 21, the Treasury officially delisted Tornado Cash and several of its smart contract addresses from the Specially Designated Nationals (SDN) list.

In a court filing, the department stated, “this matter is now moot,” asserting that a final judgment is unnecessary since the issue has been resolved.

However, Coinbase’s Chief Legal Officer, Paul Grewal, pushed back. He argued that simply removing Tornado Cash from the list does not legally end the case.

Grewal cited the “voluntary cessation” doctrine, which holds that a case is not moot if the defendant could potentially return to the same conduct.

He referred to a 2024 Supreme Court decision in the case of Yonas Fikre, where a removal from the No Fly List did not invalidate a legal complaint due to the possibility of reinstatement.

“Here, Treasury has likewise removed the Tornado Cash entities from the SDN, but has provided no assurance that it will not re-list Tornado Cash again,” Grewal stated, vowing to raise this with the district court.

Under the voluntary cessation exception, a defendant’s decision to end a challenged practice moots a case only if the defendant can show that the practice cannot “reasonably be expected to recur.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S.…

The legal saga has seen mixed rulings.

A Texas judge initially sided with the Treasury in 2023, but a later appeals court found that sanctioning the mixer’s immutable smart contracts was unlawful.

That led to the sanctions being formally overturned in January 2025.

While the sanctions may be lifted, legal troubles persist for the platform’s founders.

Roman Storm, charged with laundering over $1 billion, awaits trial in April.

Co-founder Roman Semenov remains at large, and developer Alexey Pertsev has been released in the Netherlands while appealing his conviction.

As reported, a developer has ported Tornado Cash to the MegaETH blockchain’s public testnet, enabling private transactions on the high-performance network.

MegaETH, which recently launched, boasts a throughput capacity of up to 20,000 transactions per second.

The developer, known pseudonymously as Gunboats, said the idea was sparked by the U.S. Treasury’s recent removal of Tornado Cash addresses from the OFAC sanctions list, following a court ruling earlier this year.

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