- The Coinbase CLO Blasts U.S. Treasury for Dodging Last Ruling in Tornado Cash Case
- The U.S. has removed sanctions from the crypto mixer Tornado Cash
- Grewal is condemning the U.S. Treasury for pursuing legal action against Tornado Case
CLO of Coinbase statement on the Tornado Cash Case
Coinbase’s Chief Legal Officer Paul Grewal has criticized the U.S. Treasury publicly for its actions regarding the delisting of Tornado Cash. As Grewal suggests, the U.S. Treasury is unfairly trying to prevent a final court decision. He denounces the Treasury for filing suit against Tornado Cash, even when it was removed from the Specially Designated Nationals (SDN) list. Although the Treasury currently argues that there is no need for a final court decision, Grewal asserts that such a position violates adequate legal procedures.
Coinbase CLO Paul Grewal says in recent X posts, “Power does not recede voluntarily. It’s gasps and it gasps until it no longer can. U.S Treasury filed yet another late Friday pleading against Tornado Cash. After grudgingly delisting TC, they now claim they’ve mooted any need for a final court judgment. But that’s not the law, and they know it.
“Under the voluntary cessation exception, a defendant’s decision to end a challenged practice moots a case only if the defendant can show that the practice cannot “reasonably be expected to recur.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 189, 120 (2000). Just last Term, the Supreme Court unanimously held in FBI v. Fikre, 601 U.S. 234 (2024), that the FBI did not moot a case even when it removed the plaintiff from the No Fly List and produced a declaration representing that he would not be placed on the No Fly List in the future”.
“Relying on that decision, the Fifth Circuit rejected an agency’s argument that its withdrawal of a determination “unilaterally and avoid judicial review” did not moot the case, because the agency could decide to revisit the decision and issue a similar determination against the private party in the future. Lewis v. United States, 88 F.4th 1073, 1078-1079 (5th Cir. 2023). Here, Treasury has likewise removed the Tornado Cash entities from the SDN, but has provided no assurance that it will not re-list Tornado Cash again. That’s not good enough, and will make this clear to the district court”.
Paul Grewal said that this only holds if the defendant can ensure the problem will not recur. He also stated previous cases when sanctions were waived but the case remained open for them to be reimpose subsequently. While the court was in favor of the users, defining the place of the Tornado’s smart contract, as a result, Grewal condemned the Treasury for not adhering to the court’s decision in its entirety.
Tornado Cash Finds Allies in the Crypto Space
Many in the crypto community, such as Coinbase and the Ethereum Foundation, defended Tornado Cash and its principal developer, Alexey Pertsev. According to them, the Treasury actions were unjustified and did not have explicit grounds in law.
Although lifting sanctions against Tornado Cash is a dramatic change, the Treasury is still worried about crypto mixers’ use in money laundering and cybercrime, particularly by North Korea. The incident raises the heated debate on the regulation of crypto privacy while securing national security.
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