Coinbase‘s top lawyer, Paul Grewal, is expressing confidence in the ongoing lawsuit against the US Treasury Department to overturn the ban on using the crypto mixer, Tornado Cash. In a recent tweet, Grewal commended the plaintiffs for making “simple but powerful” arguments during a critical moment in the case.
The lawsuit was initially filed in September 2022 after the US Treasury Department added Tornado Cash to the Specifically Designated Nationals and Blocked Persons (SDN) list, effectively prohibiting its use. Coinbase is funding the legal challenge, and the plaintiffs argue that the designation oversteps the agency’s legal authority and is a violation of free speech under the First Amendment of the US Constitution.
According to Grewal, there are four main arguments being made to overturn the Tornado Cash ban. First, the government cannot sanction Tornado Cash because it is software, not a foreign “national” or “person.” Second, the law only permits the government to sanction a person’s property, and the 20 smart contracts at the core of Tornado Cash software function without human control.
Third, the smart contracts aren’t owned by any foreign national or sanctioned person, and certainly not by people who happen to have a certain crypto token in their wallets. And fourth, the sanctions violate the First Amendment by blocking thousands of law-abiding American citizens from using Tornado Cash to engage in socially valuable speech, just because some bad actors also used it.
Grewal also acknowledges the risks associated with giving privacy to everyone, but he emphasizes that the Constitution and laws of the country recognize that privacy should not be taken away from all because of the unlawful acts of a few.
The plaintiffs in this challenge are among the thousands of law-abiding Americans who want to protect their privacy online, but now can’t because of the government’s sanctions, he says.
