Users of Tornado Cash will appeal the ruling in favor of the US Treasury

A group of Tornado Cash users has filed an appeal in federal court following a decision upholding the United States Treasury's decision to add the cryptocurrency exchange to its list of sanctioned entities.

In a Nov. 13 filing in the U.S. Court of Appeals for the Fifth Circuit, attorneys representing plaintiffs Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale and Nate Welch said the U.S. Treasury was “extended.” [its] Tornado Cash has jurisdiction over blocking transactions. The filing comes on the heels of a Texas federal judge's ruling in August that the crypto mixer could be subject to sanctions under the Treasury's Foreign Assets Control.

“The district court erred in concluding that the Department met three of the requirements for designation. [International Emergency Economic Powers Act] and North Korean law,” the November 13 filing said.[T]The department's action is contrary to law and beyond the statutory authority of the Administrative Procedure Act.

According to the plaintiffs, the smart contracts underlying Tornado Cash described in the lawsuit are “immutable and ownerless” and do not meet the US Treasury's regulatory definition of “asset”. The appeal also challenged the Treasury Department's definition of “interest,” saying Tornado Cash had “no legal, equitable or beneficial interest” in consumer smart contracts.

The filing is the latest legal action in a lawsuit filed by the six individuals in September 2022. The U.S. Treasury's Office of Foreign Assets Control added Tornado Cash to its Specially Designated Citizens List in August 2022. .

Coinbase's chief legal officer, Paul Grewal, said in a November 13 X thread that he supports the plaintiffs' efforts, adding that the appeals court will carefully consider the submission. The crypto exchange has been publicly supporting Van Loon and the other plaintiffs since the September 2022 lawsuit.

Ordinary Americans do extraordinary and wonderful things. Today, with the support of @coinbase and many others, the Lun plaintiffs took their case to Round 5. To defy sanctions on ownerless volatile software known as Tornado Cash. 1/6

— paulgrewal.eth (@iampaulgrewal) November 13, 2023

In the year Crypto advocacy group Coin Center, which filed its own lawsuit against the US Treasury over Tornado Cash in October 2022, similarly lost its case in federal court in Florida. The group filed an appeal with the US Court of Appeals on November 6.

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US authorities have brought criminal charges against individuals linked to Tornado Cash. In August, the Justice Department charged co-founders Roman Storm and Roman Semenov with conspiracy to commit money laundering, sanctions violations and money laundering.

Storm was released on $2 million bond after his arrest and pleaded not guilty to all charges in September. Semenov was not in jail at the time of publication. Authorities in the Netherlands arrested Tornado Cash co-founder Alexey Persev on money-laundering charges in August 2022. He was released pending sentencing in April 2023.

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