US Federal Court rules that Treasury overstepped its authority when sanctioning Tornado Cash's immutable smart contracts

A U.S. federal appeals court ruled that the Treasury Department’s Office of Foreign Assets Control (OFAC) exceeded its authority when it sanctioned Tornado Cash’s immutable smart contracts. The Fifth Circuit held in Van Loon et al. v. Department of the Treasury that those contracts are not “property” under the International Emergency Economic Powers Act (IEEPA) because they cannot be owned, controlled, or altered by any person or entity. The ruling matters because it limits how far existing sanctions law can reach into decentralized software and smart contracts. It does not necessarily end U.S. scrutiny of Tornado Cash or related crypto activity, but it marks a major legal setback for OFAC’s attempt to treat immutable blockchain code as sanctionable property, and it leaves open the broader question of how Congress might update sanctions law for modern crypto technologies.

✨ AI-generated background, compiled from web sources — not editorial content.

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• [PDF] Van Loon - United States Court of Appeals for the Fifth Circuit (ca5.uscourts.gov)
• Van Loon v. Treasury Ruling on Tornado Cash - Dynamis LLP (dynamisllp.com)
• Victory for Tornado Cash as Court Rules Sanctions Were Unlawful (bakerlaw.com)

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