Tornado Cash token soars 380% after US court rules against Treasury sanctions on immutable smart contracts
Tornado Cash’s native token, TORN, soared more than 380% following a landmark ruling by the U.S. Court of Appeals for the Fifth Circuit on November 26, 2024. The court ruled that the U.S. Treasury overstepped its authority when it sanctioned Tornado Cash’s immutable smart contract. . This decision triggered a surge in privacy coins, with TORN briefly reaching highs of $35, before settling around $17.17, according to data.
The ruling reversed a 2022 Treasury Department decision that alleged Tornado Cash facilitated more than $7 billion in illegal transactions, including transactions related to North Korea's Lazarus Group. The court ruled that Tornado Cash’s smart contracts, which are autonomously executed and cannot be modified, do not constitute “property” and are therefore not subject to Treasury sanctions under the International Emergency Economic Powers Act (IEEPA). .
The decision was a significant blow to the Treasury Department's sanctions authority and sparked a rally among privacy-focused cryptocurrencies. Other privacy coins such as Railgun (RAIL), Zcash (ZEC), and Dash (DASH) have seen significant gains following the ruling, with Railgun up 36.6%, Zcash up 26.5%, and Dash up 11.4%. did. The ruling has been widely hailed as a victory for privacy advocates and decentralized technology, with cryptocurrency leaders praising the transparency it brings to the industry.
In particular, the court's decision emphasized that immutable smart contracts cannot be owned or controlled and are therefore exempt from sanctions. This is an important distinction, as the Treasury Department initially claimed that TornadoCash, as a cryptocurrency mixing service, was enabling money laundering by bad actors. However, the court ruled that sanctions cannot be applied to the software itself, but only to the individuals or entities involved in the illegal activity.
The soaring price of TORN, which at one point soared more than 500%, reflects the market's positive reaction to the ruling. TORN was trading at less than $10 in August 2022 after the sanctions were imposed, but its market capitalization increased significantly in a short period of time. Despite the rally, TORN is still far from its all-time high of $436, set in February 2021.
Privacy advocates have widely praised the ruling. Coinbase Chief Legal Officer Paul Grewal called it a “historic victory” for cryptocurrencies and privacy, while Uniswap Labs CEO Hayden Adams weighed in on how decentralized technology stands in U.S. courts. He stated that he had proven that he had established the The ruling also points to a broader trend for crypto protocols to seek more legal recognition and counter government overreach.
