TORN Surges Over 150% After US Appeals Court Lifted Tornado Cash Sanctions

On Jan. 22, TORN, the native token of Tornado Cash, skyrocketed by over 150% after a U.S. appeals court revoked the U.S. Treasury’s Office of Foreign Assets Control (OFAC) decision to sanction the cryptocurrency mixer.

Tornado Cash’s TORN surged following the court ruling to as high as $25.48 from $8.12, the highest since November 2024. At the time of writing, TORN was trading at $16.3, up by 102% in the last 24 hours.

In a historic court ruling for the crypto industry, the United States Court of Appeals for the Fifth Circuit said in a Jan. 21 filing that “the judgment of the district court is reversed,” as “ we hold that Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the 'property' of a foreign national or entity, meaning (1) they cannot be blocked under IEEPA, and (2) OFAC overstepped its congressionally defined authority,” the court said referring to the International Emergency Economic Powers Act.

Money Laundering Charges

In August 2022, OFAC sanctioned Tornado Cash, arguing that it failed to implement measures to stop illicit activities happening on the platform, including laundering $7 billion of crypto for entities including the North Korean cybercriminal group Lazarus Group.

Following the ban on Tornado Cash, its developer, Alexey Pertsev, was arrested for allegedly facilitating money laundering. On May 14, 2024, Dutch judges at the s-Hertogenbosch Court of Appeal sentenced Pertsev to five years and four months in prison for laundering over $1.2 billion in illegal assets through Tornado Cash.

Pertsev remains in custody even though the U.S. Court of Appeals reversed the decision in favor of Tornado Cash. Pertsev presented his arguments against the decision during his trial in March 2024 and said that he could not be held liable for the actions of users on Tornado Cash protocol.

Consequences on Crypto Regulation

This court ruling has consequences beyond Tornado Cash’s prospects and sends the message that the tide is turning in crypto's favor when it comes to authorities' limitations and regulatory overreach in the crypto space.

The court ruling said Congress might want to amend OFAC and IEEPA by considering new technologies, including crypto. Twitter Blurb: