Coinbase finances Tornado Cash users’ lawsuit against US Treasury Department News ▸ US ▸ Coinbase ▸ Censorship
Coinbase finances Tornado Cash users’ lawsuit against US Treasury Department
The plaintiffs argued that the authorities overstepped their authority and also violated their rights.
2 min read
Updated: Sep. 8, 2022 at 3:45 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Coinbase is financing a lawsuit filed against the US Treasury Department by six users of sanctioned crypto protocol Tornado Cash, CNBC reported on Sept. 8.
The lawsuit argued that the sanctions were a violation of the plaintiffs’ rights as guaranteed by the US constitution, adding that the authorities overstepped their authority in sanctioning a “decentralized, open-source software project” that “law-abiding Americans (use) to engage freely and privately in financial transactions.”
Treasury Secretary Janet Yellen and OFAC Director Andrea Gacki were also defendants in the lawsuit.
Plaintiffs used protocol for legitimate purposes
The plaintiffs revealed they have some Ethereum (ETH) locked in Tornado Cash, which they can no longer access due to the US sanctions. They said they used the crypto mixer for legitimate purposes like donating to Ukraine and protecting their public identities.
The lawsuit wants the court to vacate the sanctions imposed on Tornado Cash.
The plaintiffs include two Coinbase employees, Tyler Almeida and Nate Welch, Prysmatic Labs co-founder Preston Van Loon and brother Joseph Van Loon, GridPlus engineer Kevin Vitale, and angel investor Alexander Fisher.
Coinbase’s reason for sponsoring the lawsuit
Coinabase’s CEO Brian Armstrong, in a Sept. 8 blog post, said the US sanctions would stifle innovations. Additionally, Armstrong noted that the “Treasury used a hammer instead of a scalpel” in restricting legitimate users’ access to the protocol.
The exchange’s chief legal officer, Paul Grewal, said:
“The novel sanctions harmed innocent individuals and threatened the critical development of crypto privacy protocols.”
The Tornado Cash sanction
The Tornado Cash sanction had drawn wide condemnation from the crypto community, who argued that the sanctions were inappropriate. However, US authorities vowed to pursue crypto mixers that criminals use to launder money aggressively.
Coin Center, a non-profit organization, said it was preparing to challenge the sanctions in court.
Meanwhile, since the sanction, Tornado Cash’ TORN token has shed 53% of its value in the last 30 days. However, its value increased by over 30% within the last hour after news of this lawsuit broke.
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Author 
Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Tornado Cash is a decentralized, non-custodial privacy solution built on Ethereum.
Ethereum
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Brian Armstrong, co-founder and CEO of Coinbase, stands at the forefront of the digital currency revolution.
