In August of 2022, the US government announced that it was now illegal for US residents to use the crypto mixer Tornado Cash. This service would facilitate the laundering of criminal money.
But the crypto community was strongly against this, as the ban would seriously infringe on the right to privacy. Now two crypto industry lobby groups are joining the fray.
Blockchain Association against US government
That appears from a document filed in Florida District Court. The Blockchain Association and the DeFi Education Fund have asked the court if this lobby group Coin Center can stand in the lawsuit against the US Treasury Department. The Office of Foreign Asset Control (OFAC), which is part of this ministry, is responsible for imposing the ban.
The CDC will assist Coin Center in its lawsuit as “Amica Curiae,” which roughly translates to “friend of the courtroom.” Coin Center started the lawsuit because it believes that it is not already illegal for Americans to use Tornado Cash. Many users of the service would not commit criminal transactions. Instead, they simply want to maintain their privacy when transacting with cryptocurrencies.
According to the lobby groups, OFAC has the right to impose sanctions on persons and property, but imposing a decentralized protocol on sanctions is not legal for the US government either. After all, the government must also comply with the law, and the right to privacy is enshrined in the US Constitution.
After all, nobody really owns the protocol, not even the members of the Decentralized Autonomous Organization (DAO), Blockchain Association lawyer Marisa Tashman Coppel explains on Twitter.
4/ Even assuming any DAO is a “person” (which it is not), the DAO does not control or “own” the software. The DAO is entirely distinct and Tornado Cash software would exist regardless of the DAO’s existence.
— Marisa Tashman Coppel (@MTCoppel) June 2, 2023
Lobby groups good for crypto
It is far from the first time a lobby group has taken action against the US government over crypto regulations. For example, the Chamber of Digital Commerce (CDC) has joined Coinbase in the lawsuit against the SEC. The Blockchain Association also helps Ripple in the fight against the SEC.