Unelected bureaucrats get another slap
In another somewhat landmark ruling for crypto, The Fifth Circuit Court of Appeals has essentially declared Treasury sanctions against Tornado cash to be both inappropriate and illegal. If I'm being honest it's actually kind of embarrassing that something like this could even get to an appeals court to begin with, but in crypto it is what it is, as they say.
the court found that the Treasury Department’s Office of Foreign Assets Control (OFAC) exceeded its authority when it sanctioned Tornado Cash’s immutable smart contracts.
Oh you don't say!
For anyone wondering how crypto seems to keep getting victory after victory in this landscape, the answer is simple. The government has been constantly and habitually overstepping their authority at every turn, and now that crypto communities have the resources to defend themselves there's a legal war going on between both sides. Not only is crypto winning this war, but they are making the government look like the absolute cronies that they are.
The ruling hinges on a deceptively simple question: can computer code that cannot be modified or controlled be considered “property”? The appellate court’s answer was an emphatic no.
Again this should be obvious to anyone who understands decentralization. The reason why government agencies have been able to get away with these shenanigans for so long is that new technology is often difficult to understand. Crypto is one of the best examples we've had of this in the last hundred years. There's so much complication and nuance when it comes to blockchain that the bureaucrats have just decided they'll make the rules up as they go. That's not going to fly anymore at this point. Crypto will continue getting landslide victories.
Imagine building a road that anyone can drive on. You've done a good deed and built public infrastructure; good on you, sir. The problem? Now the government wants to sue you because a bank robber used your road to escape justice. Everyone understands how ridiculous this would be out here in the real world using a simple real-life example. The same is true for actual weapons of war. Gun companies can't get sued because they produced the AR-15 used in a mass shooting. That's not a thing that happens and everyone understands why.
However with crypto this is exactly how government agencies act. Under the cover of confusion and technical complexity the administration just decides if they want to prosecute this or that individual for the "crime" of creating public infrastructure that anyone can use. They do this indiscriminately and don't have to answer to anyone.
Their tool-chest is brimming with intimidation tactics.
For example the SEC doesn't even have to take a crypto startup to court to ruin them. All they have to do is send the Wells Notice and 99% of the time no one is going to want to do business with that entity any longer. They can debank whoever they want for any reason and no one can appeal these decisions.
But the court found that since Tornado Cash’s core protocols are “immutable” – meaning they cannot be changed or controlled by anyone – they don’t qualify as property that can be sanctioned under existing law.
This type of thing is going to happen again and again over the coming years. Control is slipping away from the powerful, and the powerful clearly don't like that... but it really doesn't matter. They lose either way. Even in the case of successful court victories it just teaches devs that they need to remain anonymous for their own safety. This should have been known already but we seem to be slow learners.
The implications are significant. The ruling effectively creates a safe harbor for truly decentralized protocols that cannot be modified or controlled. While OFAC can still sanction individuals and companies, it cannot sanction the underlying code itself
Conclusion
Always loves to see another legal win for crypto. However, the drama rages on and there are still many more cases to be heard, even in the case of Tornado Cash privacy service. While sanctions against the code have been deemed illegal, the individual devs themselves still need to be vindicated. I expect that they will, but you never know.
“Mending a statute’s blind spots or smoothing its disruptive effects falls outside our lane.”
Every court win is another reason for governments to join the party rather than fighting against it. It won't be long until you see many more governments adding BTC and/or ETH to their reserves. Possibly even a few more.
Crypto has reached the point of too-big-to-fail and it's now a matter of them figuring out how to control it. So far, they can't seem to come up with an answer (if it exists).
Wall Street has almost got the bit in its teeth and once that happens, things could really go hyperbolic. Mass adoption is not far away. Worst-case scenario is 20 years, as the baby-boomers die off and the next generation grows up with Bitcoin and crypto as household words. I agree with you though. This cycle is going to be crazy, but the next will be epic.
The Indonesian President's support for citizens to deepen their knowledge of cryptocurrency highlights a forward-thinking approach to embracing the digital economy. This initiative could significantly boost financial literacy, prepare the nation for technological transformation, and unlock opportunities for blockchain-based economic growth.
However, it’s essential to establish clear regulations to protect citizens from risks such as fraud, market volatility, and misuse of cryptocurrency. Collaborative efforts between the government, educational institutions, and industry players are crucial to ensure the public can engage with this technology safely and productively.
With a balanced approach, this endorsement could position Indonesia as a regional leader in fintech innovation and a hub for blockchain advancements.
Definitely another great precedent has been set. Hopefully this continues as the crypto lobby gains more power and the new admin takes over.
If Trump actually takes power without getting couped or assassinated, this could be the bulliest bull run ever because he's surrounded now by pro-crypto people. Let the SEC burn! We're all Tornado Cash now.
-Because the US is powerful enough to enforce it's countries laws on every other citizen in the world, the US government has the ability to destroy or cause the imprisonment of people all over the world. This is a win for crypto and innovation worldwide.
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Understanding crypto is also not easy, after understanding people it is more difficult task.
Honestly there is a war going and i hope they dont succeed no matter what.
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The government fighting crypto just proves that they are the architect of poverty... Personally, I feel that Crypto is a one way ticket to financial freedom once one gets a hang of it without the government trying so hard to frustrate it.
Take my country Nigeria for example, so many youths who have turned to crypto trading are actually doing well for themselves, some of them are even employers of labour salvaging the backlash effects of increased unemployment in the country.
We have so many atrocities done in the name of religion, I don't see the government sanctioning religion or calling for its end. Basically, once it aims to emancipate the masses from financial bondage, it becomes illegal and a crime to the government.