Texas Judge Rules Tornado Cash Can't Be Sanctioned Again
In December, a U.S. appeals court found that the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) exceeded its legal authority in sanctioning Tornado Cash.
Cheyenne Ligon | Edited by Nikhilesh De on April 29, 2025, 6:43 PM
Key points:
- A Texas judge ruled Monday that the Treasury Department's sanctions against Tornado Cash were illegal and permanently barred the agency from enforcing them.
- The US Department of Justice continues to pursue the developers of Tornado Cash on criminal charges.
Following a district court ruling on Monday, Tornado Cash was officially released from U.S. sanctions.
The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) removed Tornado Cash from its sanctions list in March, months after an appeals court found that the agency “exceeded the authority granted by Congress” when it sanctioned the cryptocurrency mixing service's smart contracts in 2022.
Still, the way OFAC removed Tornado Cash from the list, and subsequent notices and motions filed by its lawyers in March, left the agency with obvious wiggle room to relist the mixing service in the future, the federal judge noted. Treasury lawyers argued that because OFAC vacated the sanctions against Tornado Cash before the district court’s final ruling (but after the appellate court’s decisive decision), the issue remains moot.
But for the six plaintiffs in Van Loon v. Treasury — all users of Tornado Cash — the issue wasn’t really in dispute. In a lawsuit filed April 21, their lawyers criticized OFAC’s response to the Fifth Circuit’s ruling as “a study in chaos” and accused the agency of “waving the mootness flag” in a last-ditch effort to “avoid an adverse ruling.”
“Enough is enough,” the plaintiff's lawyers told the judge. “It is time for this court to do what the Fifth Circuit ruled months ago… The assignment decision should be invalidated and reversed.”
In a ruling issued yesterday, U.S. District Judge Robert Pitman of the Western District of Texas said the case was not moot and sided with the plaintiffs, ruling that OFAC's designation of Tornado Cash was unlawful and therefore the agency is permanently barred from sanctioning it.
“[OFAC] is not suggesting that they will not redesignate Tornado Cash, and they may seek to ‘reproduce the exact same [designation] in the future,’” Pitman wrote. “Rather than accept that the Fifth Circuit’s decision required Tornado Cash to be delisted, Defendants argue that they exercised their ‘discretion’ in deciding to do so based on broader policy and legal considerations.”
The U.S. Department of Justice (DOJ) is currently pursuing criminal charges against two Tornado Cash developers, Roman Shtorm and Roman Semenov, who were indicted in 2023 on charges of conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitter, and conspiracy to violate sanctions.
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