A landmark ruling by the Fifth Circuit Court of Appeals has declared that the Office of Foreign Assets Control (OFAC) exceeded its authority when it sanctioned the immutable smart contracts of cryptocurrency anonymizing service Tornado Cash. The court found that the core protocols of Tornado Cash, which cannot be modified or controlled by anyone, do not qualify as property that can be sanctioned under existing law. This ruling sets a precedent for decentralized protocols that cannot be modified or controlled, creating a safe harbor for them. However, the court noted that Congress has the opportunity to update legislation to address modern technologies. The ruling highlights the challenge of regulating privacy-preserving technologies while preventing illicit use. The crypto industry must work to prevent illicit activities while preserving privacy rights. The ruling underscores the need for updated laws that account for the unique nature of decentralized systems and address security concerns.



Other News from Today