A US appeals court has ruled that the Treasury's Office of Foreign Assets Control (OFAC) exceeded its authority by sanctioning Tornado Cash's immutable smart contracts, marking a significant victory for the protocol and its users. In a decision issued on November 26, the Fifth Circuit Appeals Court stated that while the Treasury can act against property, Tornado Cash's smart contracts do not constitute property under the International Emergency Economic Powers Act (IEEPA) since they are immutable and cannot be controlled or owned. The judges clarified that these smart contracts cannot be blocked under federal law and that OFAC had overstepped its defined authority. The court directed a Texas district court to grant a partial summary judgment in favor of the plaintiffs. Consequently, Tornado Cash's smart contracts should be removed from the sanctions list, allowing US users to once again utilize this privacy-enhancing protocol.

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