Appeals court grants motion to dismiss in Tornado Cash suit

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The Eleventh Circuit Court of Appeals signed off on a joint motion previously filed by both the Treasury Department and Coin Center to dismiss Coin Center’s appeal challenging the Tornado Cash sanctions. 

It’s yet another sign of how far we’ve come, given that the government willingly removed those sanctions back in March. Attorneys for the government argued in the motion to dismiss that their willing decision made the case “moot.”

Now, while the government has clearly made strides in its acceptance of crypto, I should also point out that another case did help push it to make its decision. 

Earlier this year, in a Western Texas court, a judge ruled that the “action is unlawful and is therefore set aside” and barred the government from enforcing the sanctions if they chose not to appeal (and that time period to appeal ended on June 28). 

“The parties have conferred about the effect of these developments on this appeal. The government’s view is that OFAC’s rescission of the designation moots this appeal. Plaintiffs’ view is that this appeal will become moot after the Texas judgment becomes final and unappealable,” Coin Center and the government wrote in the motion. 

All of this is great, right? Years of court battles and money on lawyers have finally ended in outcomes that push crypto forward. 

But the big catch is that this decision unfortunately doesn’t stop the trial proceeding against Tornado Cash’s founder, Roman Storm, which is set to start next Monday, July 14. 

Storm and his lawyers will have to prove to a jury that he didn’t knowingly create or operate a money-transmitting business when he and co-founder Roman Semenov wrote the code for Tornado Cash.

“The irrationality and unfairness of these charges cannot be overstated. The Treasury Department has long recognized that developers who publish software are not money transmitters,” Paradigm’s Katie Biber wrote last month. 

The stakes are high, she further argued, because this case could have lasting repercussions for developers in crypto. 

So while we’re clearly making strides in the mass acceptance of crypto, it’s clear we still have a ways to go, and next week’s trial sets up a big battle. One that we all have to pay attention to.

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