A Texas federal court has ruled that the US Treasury Department’s Office of Foreign Assets Control (OFAC) cannot restore or impose sanctions against the crypto mixing service Tornado Cash. The ruling, handed down by Judge Robert Pitman on April 28, deemed OFAC's prior sanctions on the platform as unlawful, permanently preventing the agency from enforcing them anew. Tornado Cash users, led by Joseph Van Loon, initiated the lawsuit after OFAC added the platform’s smart contract addresses to its Specially Designated Nationals and Blocked Persons list, accusing it of laundering crypto linked to the North Korean hacking group Lazarus. The court’s decision follows a reversal from the Fifth Circuit that granted partial summary judgment in favor of the plaintiffs, which ultimately led to the sanctions being revoked. Although the Treasury had previously argued about the matter being moot after lifting the sanctions in March, the court's ruling now prohibits any future sanctions against Tornado Cash. Additionally, a petition has been filed against a Tornado Cash co-founder, highlighting concerns over potential legal implications for software developers in the crypto industry.

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