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Usha Yadav
Sep 9, 2022

Coinbase Funds Lawsuit Against US Treasury For Tornado Cash Sanctions

Coinbase
Users of the freshly sanctioned cryptocurrency mixer, Tornado Cash, filed a lawsuit against the Treasury Department on Thursday, and Coinbase is paying for it. Employees of Coinbase and other customers of the mixing service that got shut down by the Office of Foreign Assets Control (OFAC) of the Treasury in August are among the six plaintiffs. The lawsuit's justifications and the need for privacy in cryptocurrencies got mentioned by Coinbase CEO and Co-Founder Brian Armstrong in the company's official blog.
"We have no issue with the Treasury sanctioning bad actors, and we take a hard stance against unlawful behaviour," He further added,
"But in this case, Treasury went much further and took the unprecedented step of sanctioning an entire technology instead of specific individuals."

Lawsuit Against US Treasury

Tornado Cash and other mixing services disguise anonymous but easily trackable cryptographic transactions. The Treasury Department claimed that North Korean hackers and other criminal actors had utilized this business to launder more than $7 billion in digital currency over the last three years. But occasionally, valid privacy concerns lead people to employ mixing services. To protect his address from Russian hacking gangs, one plaintiff, a senior security risk analyst at Coinbase, used the service to anonymize donations to Ukraine. Another was worried about the safety of his family.

Treasury took a novel step with the sanctions to target open source software rather than a company or individual. Crypto enthusiasts have suggested that the action was excessive, that it established a new legal standard, and that it would negatively affect the IT sector.

Coinbase And SEC

Coinbase is the biggest cryptocurrency exchange in the United States by trading volume. While dealing with a recent flurry of Securities and Exchange Commission (SEC) investigations, Coinbase has publicly pushed for crypto reforms in Washington. Coinbase recently got asked for information by the SEC over the listing of cryptocurrencies that the agency suspects may have been unregistered securities. The SEC is also investigating its staking cryptocurrency rewards scheme.

Coinbase Funds Lawsuit Against US Treasury For Tornado Cash Sanctions
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

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