Tornado Cash wins major victory in U.S. appeals court ruling that OFAC exceeded its powers

Tornado Cash users have won a major victory in the U.S. Court of Appeals. The U.S. Court of Appeals has ruled that the Treasury Department's Office of Foreign Assets Control (OFAC) has ordered the cryptocurrency mixer Tornado Cash to be removed from the market.
The court ruled that the company had exceeded its powers by sanctioning Tornado Cash's immutable smart contracts.
The three-judge panel ruled that the Treasury Department should not use immutable smart contracts to mix crypto assets.
In a ruling released on the same day, the Fifth Circuit Court of Appeals found that OFAC's sanctions against Tornado Contracts were unlawful.
It overturned a lower court ruling, sanctioned Cash's immutable smart contracts, found it had exceeded its powers, and issued a sanctions order to the platform's users.
The appeals court judges ruled that the Treasury Department had the power to take action against the property, but that Tornado
Cash’s immutable smart contracts are protected by the International Emergency Economic Powers Act (IEE
The court held that a contract cannot be considered property under the 1990 Act because of the nature of the contract, which cannot be controlled or owned.
"We believe that Tornado Cash's immutable smart contracts (which provide privacy features) are
OFAC has determined that software code used to create U.S.-made products (such as software code used to create U.S.-made products) is not the “property” of a foreign person or entity, and therefore (1) it cannot be blocked under IEEPA and (2) OFAC cannot block U.S.-made products that Congress has requested to be blocked under IEEPA.
"We have concluded that the company exceeded its stated authority," the company said in a statement.
"The bottom line is that we cannot block this smart contract under federal law," Hughes said via Twitter.
"We can't block it. We can't block it at OFAC's discretion," he said, adding that the ruling doesn't mean Tornado Cash has been exonerated in all respects.
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