Tornado Cash and anonymity: Coinbase’s amazing turnaround
Coinbase as defender of anonymity – The case Tornado Cash is on the way to becoming a symbol of the struggle for individual freedom in UNITED STATES. Citizen resistance is being organized in the face of Treasury Department sanctions and the plaintiffs will be able to count on strong support: the giant Coinbase. Brian Armstrong’s teams plan to deploy their legal firepower to sustain legal action by several Tornado Cash users who consider themselves unfairly implicated. Judicial chronicle of a procedure that could become a school in the Land of Liberty.
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Tornado Cash users sue the US administration
It’s official since yesterday, at least six users of the cryptocurrency mixer Tornado Cash filed a complaint with the District Court of West Texas. The cause ? The recent addition of 44 addresses of smart contract from Tornado Cash blacklisted by the US Treasury Department. This special list, the SDN Listnormally targets terrorists, international criminals or high officials from embargoed countries and is operated by theOffice of Foreign Assets Control (OFAC). But some believe that this procedure is abusive and that she ” does not comply with the law“.
The plaintiffs ask thecancelation of this measure on the basis of three arguments legal:
- Tornado Cash only meets the definition of what can be listed on the SDN List to know ” property or property, a foreign country or a national thereof“.
- The procedure violates the Constitution’s First Amendment on free speech (in this case it is ” donations to support important and potentially controversial political and social causes“)
- The current blocking of funds held on Tornado Cash is not not legal under US law
And among the six accused, there is a employee from Coinbase who allegedly used Tornado Cash to donate to Ukraine anonymously.
Coinbase backs them in the name of privacy advocacy
Just like Vitalik Buterin before him, many people have taken advantage of the services of the mixer to protect their identity, their family or that of the people supported. In this regard, the document filed with the Tribunal yesterday states that each plaintiff is ” an american who just wants to engage in a completely legal activity in private“. Coinbase has therefore decided to join the proceedings to defend its employee and more generally the freedom in the field of cryptocurrencies.
Coinbase Chief Legal Officer Paul Grewal made a statement to CNBC on this subject :
“We saw this as a much bigger problem. (…) Because it creates a dangerous precedent where the law interferes in a technology.”
He then added that when ” bandits are on the run on a highway, no one forbids access to this road so far”. For Coinbase, US justice uses “ a hammer instead of a scalpel“. That’s why they plan to pay plaintiffs’ attorneys and all costs associated with the proceedings.
And beyond the specific case of Tornado Cash, it is also a question of preserving the nascent cryptocurrency industry. Grewal adds that at ” in a time when we should be encouraging innovation, this kind of fear and uncertainty will do the opposite. This will make developers wonder if by advancing the industry they might be putting themselves at risk.” . The standoff between cryptocurrency giants and regulators around the world continues. Money laundering, the fight against tax evasion but also individual freedom and anonymity of exchanges, so many contradictory elements with which it will be necessary to compose to draw the contours of a sector still under control.
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