"Legislating is Congress’s job—and Congress’s alone."

The Fifth Circuit's ruling to remove Tornado Cash from OFAC's sanctions list is a direct stab at the Government's recent regulation by enforcement strategy.

Here are the most important arguments:

1. The court has found that Tornado Cash smart contracts do not constitute a service or property, defining the contracts as tools that are "nothing more than lines of code," which cannot be sanctioned under current OFAC regulation.

2. The court has found that Tornado Cash does not own or control the smart contracts, as the developers revoked any role in the software's operation – making important distinctions between "mutable", which it defines as custodial, and "immutable" software.

3. The court recognizes that OFAC's framework may be outdated to apply to modern technologies, but explicitly states that it "declines the Department's invitation to judicial lawmaking", stating that

"Legislating is Congress’s job—and Congress’s alone." ✊

Updated story: https://www.therage.co/fifth-circuit-lifts-tornado-cash-sanctions/