The exchange’s lawyers consider the authorities’ decision “a dangerous precedent” that threatens user privacy

Coinbase backs the lawsuit against the US Treasury Department over the Tornado Cash ban

09.09.2022 - 06:45

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2 min

What’s new? On September 8, cryptocurrency exchange Coinbase filed a lawsuit against the US Treasury Department over imposed sanctions against the Tornado Cash transaction mixing service. The plaintiffs included six employees of the exchange and users of the crypto mixer. Speaking to CNBC, Coinbase’s chief legal officer said that the Treasury Department’s decision is improper and in itself sets “a dangerous precedent” and threatens user anonymity.

CNBC’s material

More details about the case. The plaintiffs also claim that the blocking of the service caused them serious financial harm because their funds are still frozen on Tornado Cash. The lawsuit seeks to have the crypto mixer removed from the sanctions list.

As Coinbase representatives wrote on their blog, in this case, the Treasury Department uses “a hammer instead of a scalpel.” The exchange also reported that the company will take all financial expenses in this case, including lawyers.

Earlier, lawyers of Coin Center, a non-profit crypto policy think tank, reported on the preparation of a lawsuit in connection with the crypto mixer ban. They stated that the Treasury Department’s ruling contradicts the Constitution.

What is known about Tornado Cash? After the sanctions were imposed, many representatives of the crypto community spoke out against such measures. The CEO of cryptocurrency exchange Kraken Jesse Powell said that users “have a right to financial privacy.” Uniswap protocol founder Hayden Adams criticized the banning of the entire service because of the actions of individual attackers and called the precedent a threat to freedom of speech and privacy. The developers of Zcash also noted that the authorities’ actions could negatively affect the civil liberties of Americans. Also, the crypto mixer and his team were supported by the founder of the Cardano network, Charles Hoskinson.

Read about what awaits DeFi projects after sanctions against Tornado Cash in GetBlock Magazine’s special feature.

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