The Fifth Circuit ruled that the US Treasury Department’s Office of Foreign Assets Control (OFAC) acted in an arbitrary and capricious manner when it sanctioned Tornado Cash’s open-source software instead of the individuals who misuse it. The court stated that Congress did not grant the power to OFAC to sanction software code that is owned by no one. The court also determined that the smart contracts in question did not constitute property, as property must be something that can be owned. Additionally, the court clarified that the smart contracts were not contracts but rather tools used to perform a service. The decision may have implications for the broader crypto and smart contract industry.



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