US Court Lifts Tornado Cash Sanctions, TORN Surges 1000%

The US Fifth Circuit Court of Appeals has overturned sanctions against Tornado Cash imposed by the Office of Foreign Assets Control (OFAC) in August 2022. The court ruled that the open and immutable smart contracts powering the cryptocurrency mixer cannot be considered property or services and are therefore not subject to sanctions.

Details

The court found that Tornado Cash's smart contracts are not owned by any individual or organization, nor can their usage be restricted. These characteristics make them exempt from sanctions under existing economic laws. The court stated that OFAC overstepped its authority by placing Tornado Cash on the sanctions list.

The sanctions were originally imposed following allegations that Tornado Cash was used to launder over $7 billion, including $455 million stolen by North Korea’s Lazarus Group.

Market Reaction

News of the court's decision sent Tornado Cash's native token, TORN, skyrocketing by over 1000% in just 90 minutes — from $3.60 to $40. However, by the time of writing, the price had dropped to $17.66, marking a daily gain of nearly 400%. Trading volume surged by 18,634% in 24 hours.

Users noted increased activity around TORN even before the official announcement, raising suspicions that some investors were aware of the ruling in advance.

In November 2023, Binance delisted TORN, causing its price to plummet. Despite this, certain investors continued to accumulate the token. One major holder purchased 26,300 tokens weeks before the news and has now seen over 500% returns.

While TORN has seen dramatic growth, it remains highly volatile, with its price heavily influenced by news. Investors are advised to conduct their own research before making any decisions.