The Blockchain Association, a crypto advocacy group, has submitted an amicus brief to the US Office of Foreign Assets Control (OFAC), criticizing the agency’s decision to sanction the crypto mixer Tornado Cash and highlighting potential regulatory repercussions.
In the brief filed on Monday, the Association contended that OFAC’s actions towards Tornado Cash, a privacy-protecting software, are “unlawful.”
“We argue that OFAC’s actions are unlawful, exceed statutory authority, and are arbitrary and capricious, running contrary to the Constitution,” the official statement read.
This marks the first instance where OFAC has imposed sanctions on computer software rather than individuals or entities. The amicus brief follows a district court brief filed in April, making it the second such filing in response to the case.
Blockchain Association Defends Second Time
In the April brief, the Blockchain Association defended Tornado Cash, characterizing it as merely a tool. The platform operates as a self-executing computer software protocol integrated into the Ethereum (ETH) blockchain.
The Association asserted that the software is fully decentralized and lacks an owner or operator, contrary to OFAC’s assertions. If OFAC were to succeed in imposing sanctions, it could potentially undermine the digital asset industry.
Senior Counsel Marisa Coppel of the Blockchain Association deemed OFAC’s actions as “dangerous,” exceeding their authority. She further emphasized that the sanctions pose a threat to Americans’ right to privacy.
“OFAC must see Tornado Cash for what it is: a tool that can be used by anyone. Rather than sanctioning a tool with a lawful purpose, OFAC should remain focused on the bad actors that misuse such tools.”
OFAC had sanctioned the virtual currency mixer Tornado Cash on August 8, 2022, alleging that it allowed hackers to launder $7 billion. The agency accused the platform of lacking sufficient controls to prevent it from facilitating money laundering for malicious actors.
Among the assets laundered, the accusations include $445 million allegedly hacked by the notorious North Korean hacker group, Lazarus Group.