The U.S. Treasury Department has officially removed crypto mixer Tornado Cash from its sanctions list, following a pivotal court ruling in January that said its smart contracts couldn't legally be sanctioned. The decision, announced on March 21, marks a major reversal in the government's crackdown on privacy-focused crypto tools.

According to the U.S. Court of Appeals, Tornado Cash’s immutable smart contracts aren’t the “property” of any foreign national or entity, meaning the Treasury’s Office of Foreign Assets Control (OFAC) had overreached its legal authority. As a result, several Tornado-related Ethereum addresses were also delisted.

The news instantly boosted Tornado Cash’s native token, TORN, which surged nearly 60% after the announcement. Data from CoinMarketCap shows TORN’s market cap reached around $73 million, with a fully diluted value close to $140 million.

The crypto mixer was originally sanctioned in August 2022 over allegations it was used by North Korea’s Lazarus Group to launder stolen crypto. Authorities claim Tornado Cash facilitated the laundering of over $7 billion since 2019. In one recent case, Lazarus was linked to a $1.4 billion exploit targeting crypto exchange Bybit—one of the largest thefts in the industry’s history.

While the sanctions have been lifted, Tornado Cash remains a symbol of the growing tension between privacy advocates and government regulators. With its smart contracts now deemed outside the reach of U.S. sanctions, the case sets a major precedent for how decentralized technologies are treated under the law. Still, concerns over illicit use and ongoing legal battles—like that of developer Alexey Pertsev—mean the debate is far from over.