Eleventh Circuit Dismisses Coin Center Appeal Against OFAC Tornado Cash Sanctions

The US Court of Appeals for the Eleventh Circuit has dismissed an appeal filed by crypto advocacy organization Coin Center against the US Treasury Department over its Office of Foreign Assets Control’s 2022 sanctions against the Tornado Cash mixing service. In a Thursday filing, the appellate court granted a motion to vacate a lower court ruling and remand with instructions to dismiss as part of a joint filing with Coin Center and the US Treasury. The dismissal, according to the court, would essentially conclude Coin Center’s legal challenge against the Treasury’s Office of Foreign Assets Control (OFAC).

In 2022, OFAC added multiple wallet addresses connected to Tornado Cash to its list of sanctioned entities. Coin Center filed a lawsuit alleging that the Treasury Department “exceeded [its] statutory authority” in the sanctions, though there were other lawsuits filed by interested parties, including one from six Tornado Cash users. The legal saga began in October 2023 when the district court ruled that Tornado Cash qualified as an "association" whose smart contracts amounted to blocked property under the International Emergency Economic Powers Act. This ruling granted summary judgment to the Treasury. Coin Center subsequently filed a notice of appeal in November 2023, setting the stage for a potential circuit split. In November 2024, the Fifth Circuit in Van Loon v. Treasury reversed a Texas court's decision, declaring that immutable smart-contract code is not property and cannot be sanctioned. The Treasury chose not to petition the Supreme Court after this ruling, instead opting to develop newer "targeted tools" to address illicit crypto flows more precisely. This policy shift erased the factual injury alleged by the Coin Center plaintiffs, leading both sides to file a joint motion asking the Eleventh Circuit to vacate the district ruling and remand with instructions to dismiss for mootness. The panel granted this request, formally closing the appellate docket.

The dismissal of the lawsuit and the removal of sanctions against Tornado Cash represent a significant shift in the regulatory environment for cryptocurrency. The Tornado Cash protocol remains operational on-chain, free from centralized control. Its governance token, TORN, continues to trade on decentralized exchanges that have never delisted it. However, the delisting and the appeal’s dismissal do not affect the criminal proceedings against Tornado Cash co-founders Roman Storm and Roman Semenov, who face money laundering charges in the Southern District of New York. Furthermore, it does not resolve whether developers can be held liable for downstream use of autonomous code. These questions will likely reach courts only through future enforcement actions rather than this concluded civil suit.

With the sanctions lifted and the litigation concluded, Tornado Cash returns to the regulatory grey zone that governed it before August 2022. OFAC continues to signal that it may craft narrower designations for privacy tools that demonstrably serve sanctioned actors. This development underscores the evolving nature of cryptocurrency regulation and the challenges faced by both regulators and industry participants in navigating this complex landscape. The court's decision effectively ends the legal battle between Coin Center and the US Treasury Department, marking the conclusion of the Coin Center v. Yellen appeal, which was the last remaining legal challenge to the Office of Foreign Assets Control's (OFAC) August 2022 designation of Tornado Cash. The dismissal of the lawsuit and the removal of sanctions against Tornado Cash represent a significant shift in the regulatory environment for cryptocurrency. The Tornado Cash protocol remains operational on-chain, free from centralized control. Its governance token, TORN, continues to trade on decentralized exchanges that have never delisted it. However, the delisting and the appeal’s dismissal do not affect the criminal proceedings against Tornado Cash co-founders Roman Storm and Roman Semenov, who face money laundering charges in the Southern District of New York. Furthermore, it does not resolve whether developers can be held liable for downstream use of autonomous code. These questions will likely reach courts only through future enforcement actions rather than this concluded civil suit.