Chalk one up for the good guys.
On Thursday, Coinbase announced they are funding a lawsuit brought by six individuals challenging the U.S. Treasury’s sanction of the Tornado Cash smart contracts. The announcement is a strong statement that regardless of their faults, Coinbase has crypto’s best interest at heart.
Tornado Cash TLDR
- Tornado Cash (TC) is an app on Ethereum that allows users to transfer funds privately and anonymously. This appeals to law-abiding citizens seeking privacy and criminals looking to launder money. This also appeals to people around the world without an ounce of financial freedom, who are perhaps attempting to evade the powers of an authoritarian regime
- The U.S. Treasury Department, however, has decided that criminals using TC were enough of a problem to warrant putting it on the OFAC SDN (Office of Foreign Assets Control Specially Designated Nationals And Blocked Persons) list
- This makes it illegal for U.S. citizens to interact with TC in any way
Nobody is against the government-sanctioning bad actors. Coinbase explicitly states its support for law enforcement in this quest.
The problem with the Tornado Cash sanctions is that they sanction an entire technology instead of specific individuals. This is unprecedented and, in Coinbase’s view, beyond the Treasury’s authority.
Should the lawsuit be successful, the sanctions will be reversed, and the six otherwise law-abiding plaintiffs will be removed from the SDN list.
Even if the lawsuit isn’t successful, it is wonderful to see Coinbase taking such a strong stand for the defense of privacy in crypto. It’s hard not to be encouraged hearing, “as one of the largest companies in crypto, we have a responsibility to defend the crypto industry against actions that go too far.”
It’s much easier to be optimistic about crypto’s future when you know that the big wigs are willing to fight for it. Good on Coinbase for setting the example.
Related: Starting today, Coinbase will begin integrating crypto policy efforts right into the app.