Tornado Cash’s native token, TORN, skyrocketed by over 380% following a landmark ruling by the U.S. Fifth Circuit Court of Appeals on Nov. 26, 2024.
Tornado Cash’s native token, TORN, skyrocketed by over 380% following a landmark ruling by the U.S. Fifth Circuit Court of Appeals on Nov. 26, 2024. The court ruled that the U.S. Treasury Department overstepped its authority when it sanctioned Tornado Cash’s immutable smart contracts. This decision has triggered a surge in privacy coins, with data showing TORN briefly hitting highs of $35 before settling at around $17.17.
The ruling overturned the Treasury's 2022 decision which had claimed that Tornado Cash facilitated over $7 billion in illicit transactions, including those linked to North Korea’s Lazarus Group. The court ruled that Tornado Cash's smart contracts, which execute autonomously and cannot be modified, do not constitute "property" and are therefore not subject to the Treasury’s sanctions under the International Emergency Economic Powers Act (IEEPA).
The decision represents a significant blow to the Treasury Department’s sanctions authority and has sparked a rally in privacy-focused cryptocurrencies. Other privacy coins such as Railgun (RAIL), Zcash (ZEC) and Dash (DASH) saw substantial gains following the ruling, with Railgun increasing 36.6%, Zcash climbing 26.5%, and Dash jumping 11.4%. The ruling has been widely hailed as a victory for privacy advocates and decentralized technology, with crypto leaders celebrating the clarity it provides for the industry.
In particular, the court’s decision emphasized that immutable smart contracts cannot be owned or controlled, thus exempting them from sanctions. This is a key distinction because the Treasury Department had initially argued that Tornado Cash, as a crypto mixing service, enabled money laundering by bad actors. The court, however, found that sanctions could not be applied to the software itself, only to individuals or entities involved in illicit activities.
The surge in TORN’s price, which briefly shot up by over 500%, reflects the market’s positive response to the ruling. TORN, which had been trading below $10 in August 2022 after the sanctions were imposed, saw its market cap grow significantly in a short time. Despite the rally, TORN remains far from its all-time high of $436, recorded in February 2021.
Privacy advocates have widely celebrated the ruling. Coinbase Chief Legal Officer Paul Grewal called it a "historic win" for crypto and privacy, while Uniswap Labs CEO Hayden Adams remarked that it demonstrated how decentralized technology is gaining ground in U.S. courts. The ruling also signals a broader trend of crypto protocols seeking more legal recognition and challenging government overreach.
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