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A significant legal battle concerning cryptocurrency sanctions has concluded as a U.S. appeals court approved the dismissal of the lawsuit between Coin Center and the Treasury Department over the Tornado Cash sanctions. This decision follows the Treasury's earlier reversal of sanctions against the crypto mixer, leading to a notable increase in Tornado Cash's native token, TORN.
Landmark Legal Battle Concludes
The Eleventh Circuit Court of Appeals ruled on July 3, 2025, allowing Coin Center to dismiss its lawsuit against the Treasury Department. This development marks the formal end of a high-profile legal challenge that questioned the government's authority to sanction open-source protocols like Tornado Cash. The lawsuit, initiated by Coin Center, argued that the sanctions were overly broad and infringed upon constitutional rights.
United States Court of Appeals for the 11th Circuit.
Treasury's Sanctions Reversal
The resolution of the lawsuit was largely prompted by the Treasury Department's decision in March 2025 to delist Tornado Cash from its sanctions list. This reversal came after a separate ruling by the Fifth Circuit Court that prohibited the Office of Foreign Assets Control (OFAC) from sanctioning smart contracts. A district court in the Fifth Circuit further ruled in April that OFAC could not re-sanction Tornado Cash, a decision that became legally binding on June 28, 2025, with the government agreeing not to appeal.
Impact on TORN Price and Broader Implications
Following the news of the lawsuit's dismissal, the price of Tornado Cash's native token, TORN, surged by nearly 5%, trading at $9.67, up from $9.16 earlier in the day. This positive market reaction underscores the significance of the legal outcome for the crypto community.
Key takeaways:
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The dismissal of the lawsuit signals a potential shift in how U.S. regulators approach decentralized technologies.
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Coin Center's Executive Director, Peter Van Valkenburgh, stated that the government was unwilling to defend its "dangerously overbroad interpretation of sanctions laws."
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Despite the lifting of sanctions and the lawsuit's conclusion, Tornado Cash developers Roman Storm and Roman Semenov still face criminal money laundering charges. Storm's trial is scheduled to begin on June 14, 2025, in New York.
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The case has highlighted the ongoing debate about applying existing financial laws to novel blockchain technologies and open-source software.
Future of Crypto Regulation
While the immediate legal challenge against Tornado Cash sanctions has ended, the broader questions surrounding the application of sanctions laws to decentralized tools remain. The outcome provides a precedent for future cases involving open-source protocols and privacy-enhancing technologies, emphasizing the need for more nuanced regulatory frameworks. The crypto industry will continue to monitor policy changes and legal actions as regulators adapt to the evolving landscape of blockchain technology.
Sources
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TORN Spikes 5% After U.S. Appeals Court Okays End of Another Tornado Cash Lawsuit, CoinDesk.
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Tornado Cash Lawsuit Dropped Following Treasury Sanctions Reversal, MoneyCheck.
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Treasury Drops Tornado Cash Appeal Ending Sanctions Battle, AInvest.
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US Government And CoinCenter Agree To Drop Tornado Cash Lawsuit, CoinGape.
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Court Dismisses Coin Center Vs. US Treasury Tornado Cash Appeal, MENAFN.com.
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