The Fifth Circuit Court of Appeals ruled that the Treasury Department's sanctions against Tornado Cash were overreaching

ChainCatcher news, according to Bitcoin.com, the Fifth Circuit Court of Appeals in Texas overturned the sanctions imposed on the cryptocurrency mixing platform Tornado Cash, stating that the sanctions by the Treasury Department's Office of Foreign Assets Control (OFAC) on Tornado Cash's immutable smart contracts exceeded its jurisdiction, as these smart contracts cannot be owned or controlled by any party.

The court noted that Tornado Cash's immutable smart contracts do not fall under the definition of "property" in the International Emergency Economic Powers Act, as these self-executing programs operate independently and are not affected by shutdowns or modifications. The ruling also addressed the plaintiffs' defense of Tornado Cash's legitimate applications, such as ensuring financial privacy and preventing cyber threats.

Legal analysts expect that this ruling will contribute to the ongoing discussions regarding cryptocurrency regulation and the governance of open-source blockchain systems.

OFAC has not indicated whether it will appeal this case to the Supreme Court. Currently, the case has been returned to the district court for further proceedings based on the appellate court's ruling.