An appeal was filed in federal court by six users of Tornado Cash after a ruling that upheld the decision of the US Treasury Department to add the mixing service to the list of sanctioned organizations.
The filing was submitted on November 13th by lawyers on behalf of Nate Welch, Tyler Almeida, Kevin Vitale, Alexander Fisher, Joseph Van Loon, and Preston Van Loon in the US Court of Appeals for the Fifth Circuit.
The plaintiffs have argued in the filing that sanctioning transactions that take place on Tornado Cash do not fall under the authority of the US Treasury department.
This filing was in response to a decision issued by a federal judge in Texas back in August. The ruling dictated that the sanction of the crypto mixer was valid under the regulation of the Office of Foreign Assets Control (OFAC).
According to the plaintiffs, there was an error by the district court because the Department did not satisfy the three requirements mentioned in the North Korea Act and the International Emergency Economic Power Act.
Thus, they said in the filing that the actions taken by the department were not in line with the law and they were exceeding their authority as highlighted in the Administrative Procedure Act.
The plaintiffs said that the smart contracts mentioned in the lawsuit related to Tornado Cash did not meet the regulatory definition of ‘property’ outlined by the Treasury department.
Therefore, they cannot be subject to any sanctions because they are ‘ownerless’ as well as ‘immutable’. Likewise, they also challenged the definition of ‘interest’ used by the Treasury.
They stated that Tornado Cash does not have any beneficial, legal, or equitable interest in the smart contracts of its users.
The six individuals had first filed the lawsuit back in September last year and this filing was the latest move they have made.
In August last year, the Office of Foreign Assets Control (OFAC) of the US Treasury department added Tornado Cash to its list of sanctioned entities.
This resulted in outrage and criticism from people part of the crypto space. On November 13th, Paul Grewal, the legal chief officer of crypto exchange Coinbase, also took to X to discuss the matter.
He said that was also in support of the plaintiffs and added that the filing would be carefully considered by the appellate court.
Coinbase has supported the six individuals publicly since they filed the lawsuit last year. Coin Center, a crypto advocacy group, had also filed a similar lawsuit against the US Treasury in October last year.
However, they also suffered a loss in Florida federal court. On November 6th, they took to the US Court of Appeals for the Eleventh Circuit to file an appeal.
US authorities have also taken legal action against individuals who had any involvement with Tornado Cash, including co-founders Roman Semenov and Roman Storm.
In August, the Department of Justice (DOJ) filed criminal charges of conspiracy to commit sanctions violations, money laundering and operating an unlicensed money-transmitting business against them.