TL;DR
- The U.S. Court of Appeals for the Eleventh Circuit dismissed the Tornado Cash sanctions case as moot after OFAC rescinded its designation, officially ending the three-year civil standoff.
- Originally blacklisted in August 2022 for alleged money laundering ties, Tornado Cash fought back via Coin Center and a Texas court, leading to the Treasury lifting sanctions in March 2025.
- Despite this landmark civil victory for open-source protocols, Tornado Cash’s co-founder still faces a criminal trial in New York, underscoring ongoing legal risks for privacy tools.
A landmark decision has closed the long-running battle over U.S. sanctions on Tornado Cash, the Ethereum-based mixer once blacklisted for alleged money laundering. On July 7, the U.S. Court of Appeals for the Eleventh Circuit granted a joint motion by the Treasury Department and crypto advocacy group Coin Center to dismiss the case.
With the sanctions rescinded earlier this year, the court declared the dispute moot, marking a pivotal win for open-source protocols and privacy tools in the blockchain space.
This is Coin Center’s case https://t.co/9UYVBXG0ti
— Neeraj K. Agrawal (@NeerajKA) July 7, 2025
End of a Three-Year Legal Standoff
Back in August 2022, the Treasury’s Office of Foreign Assets Control slapped Tornado Cash with sanctions, accusing it of facilitating illicit transfers tied to entities like North Korea’s Lazarus Group. U.S. persons were barred from interacting with the mixer, sparking an immediate challenge from Coin Center.
After a separate Texas court ordered OFAC to lift the designation, the Treasury followed suit in March 2025. This week’s appeals court action formally sealed the reversal, officially ending the civil sanctions chapter.
Moot Point: Joint Motion Brings Closure
Rather than litigate further, both sides filed a joint motion to wipe the case from the docket. In a terse court filing, government lawyers acknowledged that OFAC’s rescission “renders this appeal moot,” while Coin Center concurred pending the finality of the Texas judgment.
The clerk’s office accepted the bid to dismiss, and no further briefs or opinions will be issued. Peter Van Valkenburgh from Coin Center praised the result on X, describing it as: “the official end to our court battle over the statutory authority behind the TC sanctions.”
Tornado Cash’s Criminal Shadow Lingers
Despite this civil triumph, Tornado Cash’s co-founder, Roman Storm, still faces a criminal trial in the Southern District of New York, set to begin July 14, 2025. Storm and fellow developers are charged with conspiracy to launder funds and operating an unlicensed money transmission service.
Prosecutors allege billions in illicit assets passed through the mixer. As that case unfolds, defenders argue that writing code for autonomous smart contracts cannot constitute a crime. This resolution sends ripples through the industry, underscoring limits on administrative overreach when targeting decentralized software. It may embolden other open-source projects facing similar regulatory threats.
