Van Loon filed a lawsuit against the U.S. Department of the Treasury regarding the sanctions on Tornado Cash

According to ChainCatcher news, the plaintiff Van Loon appealed to the Fifth Circuit Court on September 2, suing the U.S. Department of the Treasury for its decision to place Tornado Cash on the Specially Designated Nationals (SDN) list. The plaintiff argues that the Treasury imposed sanctions on this open-source project without clear guidelines, which could threaten programmers' First Amendment rights. Van Loon and his team sued the Treasury in September 2023, accusing it of overstepping its authority.

Tornado Cash was sanctioned for allegedly being involved in money laundering activities, with the government claiming that the platform has been linked to over $7 billion in illegal funds since 2019. The Electronic Frontier Foundation (EFF) supports this lawsuit, expressing concerns that government sanctions could have a chilling effect on open-source software development. A lower court previously dismissed the lawsuit, stating that the sanctions were limited to transactions involving Tornado Cash smart contracts and did not affect the development and discussion of open-source code. However, the EFF and other digital rights advocates remain vigilant about the broader implications of the case, emphasizing the importance of protecting programmers' rights.