What You Need to Know:

• Paul Grewal, chief legal officer at Coinbase, has publicly criticized the U.S. Treasury for attempting to bypass a court ruling related to Tornado Cash by removing it from its sanctions list.
• The Treasury Department had originally blacklisted Tornado Cash in 2022 for allegedly being involved in laundering $445 million linked to the Lazarus cybercrime group, but a court found some of its actions unconstitutional.
• Despite the recent delisting, Grewal warns that without a definitive court decision, there are no guarantees that Tornado Cash will not face sanctions again in the future.

Grewal pointed out that the Treasury’s move to moot the case is a tactic to avoid a ruling from the Fifth Circuit Court of Appeals, which could allow for future re-blacklisting.

Grewal’s comments highlight concerns regarding the assurance—or lack thereof—that the Treasury will not impose sanctions on Tornado Cash once more.

“After grudgingly delisting Tornado Cash, they now claim they’ve mooted any need for a final court judgment. But that’s not the law, and they know it,” Grewal stated on social media. Translation: After reluctantly removing Tornado Cash from sanctions, they argue there’s no longer a need for a court ruling. But that’s legally inaccurate, and they are aware of it.