The ruling comes down to the definition of "property", and the court finds that Tornado Cash's immutable smart contracts aren't property. Treasury can only sanction property under the law. Tornado is a tool that nobody controls, and which OFAC cannot sanction.

> Indeed, when someone has a property interest, he or she typically has the “rights of possession and control.” And “one of the most essential sticks in the bundle of rights that are commonly characterized as property” is “the right to exclude others.”

> The immutable smart contracts at issue in this appeal are not property because they are not capable of being owned. More than one thousand volunteers participated in a “trusted setup ceremony” to “irrevocably remov[e] the option for anyone to update, remove, or otherwise control those lines of code.” And as a result, no one can “exclude” anyone from using the Tornado Cash pool smart contracts.

Immutability is what makes this whole thing work for Tornado. The ruling is basically a whole explanation of why an immutable smart contract isn't property, isn't a service, isn't a patent, it isn't anything Treasury can touch. In fact, it's not even a "contract" (no counterparty).

But the mutable aspect of Tornado -- the optional gas fee anonymization middlemen, who are registered via a mutable smart contract -- they're still in the rough. Which makes the rally in the TORN coin those middlemen get paid in all the weirder.

It seems pretty clear to me that Treasury can sanction all of those Tornado relayers, because relayers have control over their actions; their participation happens through a mutable smart contract, and they can stop at any time.

It used to be that you buy crypto because you're either a true believer, you want to do something illegal and don't realize the blockchain is forever, or you think there's a greater fool.

Between recent sanctions and protectionist policies springing up, I wonder if there's more merit to crypto being a viable way to move large amounts of money outside the traditional financial system. Gold prices spent the 90's in decline, arguably as a peace dividend from the end of the Cold War and economic liberalization.

Maybe crypto is now a bet that there will be more need to facilitate gray market transactions as trade gets harder.

[Recycling a comment from another submission on this]

> The court found the contracts aren't property because no one can control or change the application's code any longer. In fact, the creators took pains to make sure of that.

Hmmm... Hunting for analogies, perhaps it's like an event where people arrive at the park, everybody puts a fixed $20 in their own opaque anonymous box, and everyone blindly shuffles boxes before leaving with (probably) someone else's box, thus cross-shuffling their money/coins.

Sure, the $20 before and after is property, but the event itself isn't really own-able in the same way.

Correct title: Tornado Cash Sanctions Overturned by U.S. Appeals Court

It's a fair decision legally, but I'm really quite uncomfortable to see a large financial services company bragging that it defeated government regulatory efforts and its customers can now freely transact with a money laundering service.

The money laundering service won?

Boy I love the continued insistence in America that law should be based entirely on stupid, niche, completely made up technicalities instead of just accepting that laws are made for a purpose and that purpose should have just as much weight.

Glad that we will continue to live in a country where you only get rights if you can afford to construct an absurd business that abuses poorly thought out pedantry just to do the same thing that is explicitly illegal but "with computers so it's different".