Coinbase CLO criticizes US Treasury for ignoring court ruling to remove Tornado Cash from sanctions list

According to Cryptonews, Paul Grewal, Chief Legal Officer of Coinbase, criticized the US Treasury Department on Tuesday for ignoring the Fifth Circuit Court's ruling to remove Tornado Cash from the sanctions list, pointing out that the government has wrongly applied sanctions laws to immutable smart contracts. Grewal's remarks on X were a response to the recent ruling by the US government regarding the Fifth Circuit Court, which found that Tornado Cash's immutable smart contract does not qualify as property under US sanctions laws. The court determined that this classification means that Tornado Cash must be removed from the Ministry of Finance's Specially Designated Nationals and Blocked Persons (SDN) list. Despite the court's ruling, officials from the Ministry of Finance stated in court documents that they will proceed to remove Tornado Cash from the list, but requested more time and stated that the ruling only applies to immutable smart contracts and does not affect the broader designation of Tornado Cash as an entity subject to sanctions. The Ministry of Finance is also concerned about the use of coin mixers for money laundering, especially the funds of the Lazarus Group in North Korea, citing national security reasons. Grewal countered that the Ministry of Finance's response was insufficient, implying that it had not learned from the court ruling. He stated that Coinbase will submit a response to support the court ruling and challenge the actions of the Ministry of Finance. In January, it was reported that the US appellate court overturned the Tornado Cash sanctions ruling and remanded the case for retrial.