Tornado Cash Sanctions Case Dismissed Ahead of Co-Founder’s Trial, Marking Legal Turning Point for Crypto Mixer

After years of legal wrangling, the high-profile case challenging the U.S. government's sanctions on crypto mixer Tornado Cash has come to a close—at least in one courtroom. On June 7, the Eleventh Circuit Court of Appeals officially dismissed a lawsuit brought by Coin Center, a leading crypto policy advocacy group, against the U.S. Treasury Department.

Coin Center’s director, Peter Van Valkenburgh, confirmed the development in a post on X, stating, “This is the official end to our court battle over the statutory authority behind the TC sanctions. The government was not interested in moving forward and defending their dangerously overbroad interpretation of sanctions laws.”

The legal dispute stemmed from the Treasury’s 2022 decision to sanction Tornado Cash, a decentralized privacy tool accused of facilitating large-scale money laundering. At the time, the Treasury’s Office of Foreign Assets Control (OFAC) said the platform had been used by North Korea-linked hacker group Lazarus to obscure the origins of illicitly obtained funds—totaling millions of dollars.

Mixed Legal Outcomes Across Jurisdictions

Coin Center argued the sanctions were unconstitutional, citing First Amendment violations and a lack of clarity over OFAC’s authority. However, in November 2023, a district court rejected those claims, ruling that OFAC had acted within its legal mandate.

Then, in a surprising shift earlier this year, a Texas court ordered OFAC to rescind the sanctions on Tornado Cash. Rather than appeal, the government complied—prompting the Eleventh Circuit to conclude that the case was effectively moot. The court noted that, while Coin Center believed the case would only become moot once the Texas decision became final, the Treasury saw no need to continue legal proceedings.

Co-Founders Still Facing Criminal Trials

Although the civil sanctions case is closed, Tornado Cash’s legal troubles are far from over. Co-founder Roman Storm is scheduled to stand trial next week, following a U.S. Department of Justice (DOJ) indictment accusing him of facilitating illegal financial transactions through the platform. Storm has repeatedly denied the charges, claiming that neither he nor his partners knowingly enabled criminal misuse of Tornado Cash’s technology.

The project’s other co-founders have also faced serious legal consequences. In May 2024, Alexey Pertsev was convicted on related charges and sentenced to 64 months in prison. He has since been released under house arrest and electronic monitoring. A third co-developer, Roman Semenov, was also named in the DOJ indictment but remains at large and is being actively sought by authorities.