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Key takeaways:
- Coinbase is supporting plaintiffs who want the US government’s sanctions against crypto mixer Tornado Cash lifted.
- The Chief Legal Officer of Coinbase believes that “we should not deprive everyone of their privacy simply because of the illegal actions of a few.”
- This motion purports to be part of a larger effort to restore internet privacy rights for Americans.
Leading cryptocurrency exchange Coinbase announced its backing for a legal action against the US Treasury to lift the restrictions on the cryptocurrency mixer Tornado Cash.
The defendants, in this case, are the United States Office of Foreign Assets Control (OFAC), Janet Yellen, the Secretary of the Treasury, and Andrea Gacki, the Director of OFAC. The filing is being made by Joseph Van Loon, Tyler Al-meida, Alexander Fisher, Preston Van Loon, Kevin Vitale, and Nate Welch.
Tornado Cash, a cryptocurrency privacy tool that the plaintiffs are forbidden from using, has been objected to in a petition for partial summary judgement. They claimed that the penalties imposed against the crypto mixer are illegal in the petition.
The Coinbase-backed plaintiffs requested that the U.S. Office of Foreign Asset Control (OFAC) resolve for the first two counts from its initial complaint submitted in September 2022 in a motion for a partial summary judgement filed on April 5 in a Texas District Court.
The judge will rule on certain facts, but not all of them; those will be decided at trial if the petition for a partial summary judgement is granted.
The two counts alleged that OFAC had broken the law by exceeding its authority under the International Emergency Economic Powers Act (IEEPA) and had violated the First Amendment’s guarantee of freedom of expression.
Crypto advocates are carefully following the case because it could have repercussions for the legitimacy of privacy-enhancing technologies and the accessibility of their use by US citizens.
The responses were described as “simple but powerful” by Coinbase’s Chief Legal Officer Paul Grewal in a tweet on Wednesday. Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale, and Nate Welch made the cases.
In the past, Brian Armstrong, CEO of Coinbase, claimed that the Treasury Department had overstepped its bounds by “sanctioning an entire technology instead of specific individuals.” The lawsuit against the US Treasury Department was also sponsored by Coinbase.
In the meantime, it’s important to observe that Coinbase fights its own legal battles after receiving a Wells notice last month.
The news follows a former Tornado Cash developer’s announcement that a new cryptocurrency mixing service is being created to fix a “critical flaw” in the authorised cryptocurrency mixer.
There are claims that Tornado Cash and other privacy protocols are becoming more and more crucial for people who want to safeguard their privacy online.
Many argue that if the OFAC can sanction unalterable, open-source software code, it may be able to outlaw intangible ideas that are not property. As a result, this might stifle innovation and stunt the expansion and growth of the overall cryptocurrency industry.
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