Regulation

TORN Token Rally 60% As US Treasury Drops Sanctions on Tornado Cash

Published

7 hours ago

March 21, 2025

The US Treasury Department officially clarified that the Tornado Cash crypto mixing service is no longer on the Specially Designated Nationals (SDN) list. The move comes after a federal court in late 2024 passed a verdict that the immutable smart contracts on the protocol could not be regarded as “property” under the anti-sanctions law. The move prompted a rapid 50% surge in the value of the TORN token shortly after the announcement.

Tornado Cash Sanctions Lifted by U.S.; TORN Token Jumps Over 60% in Minutes

The U.S. Treasury Department has delisted Tornado Cash today. The change was reflected in the updated Specially Designated Nationals (SDN) list maintained by the Office of Foreign Assets Control (OFAC). Ethereum addresses connected to Tornado Cash were also delisted.

This decision came following a decision made in November 2024 by the U.S. Court of Appeals for the Fifth Circuit. The court affirmed that smart contracts used by Tornado Cash were not considered to be property under the International Emergency Economic Powers Act. As a result, the Treasury no longer had the authority to sanction those contracts.

Following the announcement, the TORN token saw a dramatic price rise. It surged over 50% within minutes, with increased trading activity on major exchanges. Additionally, the 24-hour trading volume spiked by 950% to $1.79 million. Market analysts attributed the spike to renewed confidence in the protocol’s legal standing.

Legal Scope of Smart Contracts

In November 2024, the Fifth Circuit Court ruled against OFAC’s designation of Tornado Cash’s smart contracts. The court clarified that immutable, self-executing code does not qualify as property. This legal distinction was central to the delisting.

OFAC originally sanctioned Tornado Cash in August 2022. The agency cited its use in laundering over $7 billion in crypto assets. However, the recent court ruling limited the reach of sanctions under current U.S. law.

The Treasury Department responded by beginning the delisting process on March 18, 2025. The update became official three days later.

Earlier this month, Coinbase’s Chief Legal Officer, Paul Grewal, criticized the U.S. Treasury for partially defying a court ruling that invalidated sanctions on Tornado Cash. Grewal and other industry leaders condemned the move, arguing that it undermined congressional oversight.

Developers Still Face Charges

Although the protocol is no longer sanctioned, legal proceedings against its developers continue. Roman Storm, one of the co-founders of Tornado Cash, faces trial in July 2025. He was charged with money laundering and sanctions violations in August 2023.

Roman Semenov, another co-founder, remains on the SDN list. However, the cyber-related tag has been removed. He is still designated under North Korea-related sanctions. Lazarus Group, which is a North Korean cybercrime group, is accused of using Tornado Cash in several crypto thefts. Some of them include $455 million from the Ronin Bridge hack, $96 million from the Harmony Bridge theft, as well as $7.8 million from the Nomad exploit.

Recently, the Ethereum Foundation contributed $1.25 million for Alexey Pertsev’s defense stating that open-source and privacy projects should be defended.