U.S. Government Ends Legal Battle Over Tornado Cash Sanctions
The U.S. government has officially stepped away from its high-profile lawsuit against Tornado Cash, a crypto mixer once at the center of controversy over privacy and financial crime. As of June 28, 2025, court documents confirm that all parties—including the Department of the Treasury, crypto advocacy group Coin Center, and other plaintiffs—have agreed to have the case declared moot, meaning there’s no longer a live issue requiring litigation.
This marks a quiet but definitive end to a legal saga that stirred deep debate within the crypto industry about the boundaries of privacy, code as speech, and the scope of U.S. sanctions law. The decision follows the Treasury Department’s removal of Tornado Cash from its sanctions list back in March, signaling a shift in regulatory posture toward decentralized technologies.
Tornado Cash is a blockchain mixer that allows users to anonymize transactions by obscuring the link between sender and recipient addresses. While designed to enhance financial privacy, the tool gained infamy in 2022 when North Korea’s Lazarus Group used it to launder over $455 million in stolen crypto—prompting the U.S. to impose sanctions.
The now-abandoned lawsuit had challenged the statutory authority under which those sanctions were imposed, raising broader constitutional questions about the legality of sanctioning open-source software protocols. Critics argued that such actions represented a dangerous overreach of government power and set a troubling precedent for punishing code rather than conduct.
Peter Van Valkenburgh, Executive Director at Coin Center, confirmed the legal battle’s end in a statement on X:
“This is the official end to our court battle over the statutory authority behind the TC [Tornado Cash] sanctions. The government was not interested in moving forward and defending their dangerously overbroad interpretation of sanctions laws.”
With the case closed, many in the Web3 and crypto privacy space are breathing a sigh of relief. The dismissal could serve as a turning point in how regulators engage with decentralized and permissionless protocols.
Still, questions remain about the future of crypto mixers and the balance between financial privacy and national security. While Tornado Cash is no longer in legal limbo, the conversation around privacy-enhancing technologies in crypto is far from over.
Source: Top Tech News
