Fifth Circuit Rules Treasury Exceeded Authority; Tornado Cash Smart Contracts Not 'Property'

Nov 26, 2024, 11:33 PM

The U.S. Court of Appeals for the Fifth Circuit has ruled that the Department of the Treasury exceeded its authority when it sanctioned Tornado Cash's immutable smart contracts. The court determined that these smart contracts are not 'property' under the International Emergency Economic Powers Act (IEEPA) because they are not capable of being owned, and therefore cannot be subject to sanctions. Coinbase helped lead the challenge against the Treasury's actions, and this decision is seen as a significant victory for the cryptocurrency industry, privacy advocates, and developers of decentralized protocols. As the court stated, 'Because these immutable smart contracts are not 'property', OFAC overstepped its congressionally defined authority.'