📚 Coinbase Employees and Ethereum Backers Sue US Treasury Over Tornado Cash Sanctions

Six users of Tornado Cash, a popular decentralized cryptocurrency service, filed a lawsuit on Thursday against the U.S. Treasury Department, Secretary Janet Yellen, and other officials over their decision to slap sanctions on the service in August. From a report: The outcome of the case, which turns on the novel legal question of whether the U.S. government can impose sanctions on publicly-available software code, is likely to have implications for the crypto industry for years to come. In a 20-page complaint filed in federal court in Texas, the users claim the decision to sanction Tornado Cash exceeded the government's authority, and violated their free speech and property rights under the U.S. Constitution, and "threatens the ability of law-abiding Americans to engage freely and privately in financial transactions." In recent years, Tornado Cash has emerged as a popular tool for those wishing to hide their crypto transactions. Using smart contracts on the Ethereum blockchain, it allows users to deposit crypto into a pool alongside other users and then distribute it to third-party wallets -- the process makes it highly difficult to determine who gave funds to a given wallet. The plaintiffs in the case include Preston Van Loon, a prominent figure in the Ethereum community who claims he cannot access thousands of dollars worth of Ethereum deposited with Tornado Cash, and his brother, Joseph, who says he intended to use the service to privately fund an Ethereum node and staking service but can no longer do so because of the sanctions. The plaintiffs also include Tyler Almeida, a California security analyst at Coinbase, who alleges that he used Tornado Cash to make anonymous donations to support Ukraine. Almeida claims the U.S. placing sanctions on the service impedes his right to donate -- and by extension his right to express himself under the First Amendment. Almeida is one of two Coinbase employees to put their name on the lawsuit. The company, whose CEO Brian Armstrong has vocally objected to the sanctions on Tornado Cash, is paying the legal bills of the employees and four other plaintiffs.

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