Roman Storm, co-founder of cryptocurrency mixing platform Tornado Cash, is hoping to have the charges against him dropped after sanctions against his platform were dropped.

In the storm December 18 Motion to dismissHe is martyred Recent Fifth Circuit ruling The Treasury Department's Office of Foreign Assets Control (OFAC) has gone too far by imposing sanctions on Tornado Cash's immutable smart contracts. The ruling recognized that independent software that is not controlled by anyone could not be classified as proprietary.

The ruling "makes clear that there is no intentional action that Mr. Storm could have taken here," the document said. Furthermore, “the developers’ lack of control over the proceeds renders them legally incapable of conspiring to commit money laundering, and negates the knowledge element of the money laundering charge.”

“Tornado Cash is difficult to control due to the immutable nature of smart contracts,” said Stephen Ajayi, technical director of decentralized application auditing at cybersecurity firm Hacken. Decryption. "It is completely decentralized, globally accessible, and Ethereum is difficult to censor, which is the basic principle of decentralization.

These points are allegedly exacerbated after the Court of Appeal found that smart contracts “are not the ‘property’ of a foreign national or entity” and that they “cannot be blocked” under the law. Contract creators are also “powerless to prevent” any sanctioned entity from using them.

“Mr. Storm could no longer choose to stop them any more than he could choose to stop the sun from rising,” the document said.

Tornado Cash is a decentralized system Coin mixer Created to preserve the privacy of crypto users by anonymizing deposits through cryptography. The service has seen outflows from wallets linked to major hacks. Because of such transactions — including some allegedly linked to North Korea — the U.S. Treasury Department... Tornado Cash was approved in early August 2022.

Privacy advocates have reacted favorably to the Fifth Circuit's recent ruling. “This is a step in the right direction,” recognized Anoop Nanra, CEO of web intelligence and security company Trugard Labs.

Nanra raised concerns about the extent of the overreach. The ruling also highlighted the issue, stating that the justices “rejected the Department’s invitation to make judicial laws—and to review the action of Congress under the guise of interpreting it.”

The justices stressed that “legislation is the task of Congress, and it is the task of Congress alone.” While privacy advocates welcome the ruling, the impact of these measures has been limited.

However, some believe that the government should try to tighten its grip on cryptocurrencies further. Irfan Shaik, founder of the Interstate blockchain auction project, suggests a more radical solution. According to him, regulators could target the Ethereum network by regulating how its validators work.

“The government can target mixer users and even penalize block makers for including censored transactions in their blocks,” he explained.

“Big builders are actually monitoring sanctioned Ethereum transactions,” he stressed. The data is still from Censorship.pics censorship tracking service It shows that Ethereum block creators monitoring transactions dropped from less than 70% this summer to less than 5%.

Modified by Stacey Elliott.