A U.S. court ruled that OFAC overstepped its authority in sanctioning the Tornado Cash smart contract

ChainCatcher News, the U.S. Fifth Circuit Court of Appeals overturned a lower court's ruling, determining that the Office of Foreign Assets Control (OFAC) exceeded its authority in sanctioning the Tornado Cash immutable smart contracts, marking a significant victory for the protocol and its users. The panel of three judges noted in their opinion that while the Treasury has the authority to act against "property," the immutable nature of Tornado Cash's smart contracts means they cannot be controlled or owned, and therefore do not constitute property under the International Emergency Economic Powers Act (IEEPA).

Coinbase Chief Legal Officer Paul Grewal stated that these smart contracts must now be removed from the sanctions list, allowing U.S. users to once again utilize this privacy-preserving protocol. The appellate court has instructed the Texas District Court to approve the partial summary judgment motion filed by plaintiffs-appellants Joseph Van Loon and others.