A recent ruling by a U.S. judge declared that Tornado Cash holds the legal status of a “person.” This development came on the heels of a previous verdict in June, which recognized the decentralized autonomous organization Ooki DAO in a similar manner.
U.S. Judiciary Designates Tornado Cash as ‘Person’ in OFAC Case
In a legal face-off with the U.S. government, specifically the OFAC, the plaintiffs posited that Tornado Cash is simply decentralized software. On the contrary, the government viewed it as an organization facilitating cryptocurrency mixing. Central to the dispute was whether the OFAC held the power to impose sanctions on Tornado Cash, and if such an action infringes on the plaintiffs’ freedom of speech.
Yet, the court dismissed the plaintiffs’ stance, recognizing Tornado Cash as an entity fit for OFAC designation. The court reasoned that Tornado Cash aligns with the regulatory description of an “association,” given the collaborative efforts of its founders, developers, and its DAO governance model towards shared objectives. U.S. judge Robert Pitman declared:
The record sufficiently supports OFAC’s determination that the founders, the developers, and the Tornado Cash DAO have acted jointly to promote and govern Tornado Cash and to profit from these activities.
Furthermore, Judge Pitman identified that Tornado Cash holds a vested interest in the smart contracts it establishes, which aligns with the regulatory classification of “property.” These contracts, which autonomously generate revenue as fees for Tornado Cash, represent a tangible benefit. Pitman elucidated this perspective in the court documents.
When it comes to First Amendment concerns, Pitman clarified that the government’s moves don’t infringe upon safeguarded speech. The designation solely curtails transactions linked to Tornado Cash’s property rights, without restricting engagement with its open-source code or other services.
Pitman’s judgment emphasized, “The fact that smart contracts do so without additional human intervention, like a vending machine, or that they are immutable, does not affect its status as [a] type of contract and, thus, a type of property within the meaning of the regulation.”
The court documents also revealed that the plaintiff’s Fifth Amendment claims were essentially set aside, given their lack of follow-through beyond the preliminary grievance, even as the government sought a summary judgment for all claims. In conclusion, judge Pitman negated the plaintiffs’ request for summary judgment while endorsing the government’s counter-claim.
He said he firmly believed that the OFAC acted within its legal boundaries in its decision concerning Tornado Cash, ensuring no breach of the plaintiffs’ constitutional privileges. The verdict concerning Tornado Cash mirrors a preceding lawsuit involving Ooki DAO, initiated by the U.S. Commodity Futures Trading Commission (CFTC).
On June 9, 2023, the CFTC clinched a victory when the judge determined that the Ooki DAO qualifies as a “person” under the Commodity Exchange Act. “This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure,” CFTC Division of Enforcement director Ian McGinley said at the time.
What do you think about the judge’s decision regarding Tornado Cash being classified as a person? Share your thoughts and opinions about this subject in the comments section below.
from Bitcoin News https://ift.tt/r20aK7W
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