A Texas District Court has overturned the sanctions against the Tornado Cash protocol, marking a significant victory for privacy-preserving technologies in the U.S. The Treasury’s Office of Foreign Assets Control (OFAC) initially sanctioned Tornado Cash in August 2022, claiming it assisted the North Korean Lazarus Group in laundering $455 million of stolen digital assets. The sanctions prompted the arrest of Tornado Cash developer Alexey Pertsev, who was sentenced to over five years in prison for laundering $1.2 billion in illicit assets. Despite the court's reversal of the sanctions on January 21, Pertsev remains in custody facing money laundering charges because Tornado Cash, a non-custodial crypto mixer, does not control user funds. During his trial, Pertsev was criticized for failing to prevent misuse of the protocol, a point dismissed by the court, which stated he could have taken greater security measures.

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