Coinbase Legal Representative Confident in Defeating US Tornado Cash Ban as Lawsuit Reaches Critical Point

Coinbase’s chief legal officer, Paul Grewal, is confident that the ongoing lawsuit against the U.S. Treasury Department to overturn the ban on using Tornado Cash (TC) will be successful. Grewal recently took to Twitter to express his optimism, stating that “simple but powerful” legal arguments are being made during a crucial moment in the case.

The lawsuit was filed by Coinbase in September 2022 after the U.S. Treasury Department added the crypto mixer to the Specifically Designated Nationals and Blocked Persons (SDN) list, which effectively prohibited its use.

Coinbase is funding the lawsuit, and the plaintiffs argue that the designation is a violation of free speech under the First Amendment of the U.S. Constitution and oversteps the agency’s legal authority.

Grewal outlined the four main arguments being made to overturn the TC ban. Firstly, the government cannot sanction TC because it is software and not a foreign national or person. Secondly, the law only permits the government to sanction a person’s property, and TC’s smart contracts cannot be altered, deleted, or controlled.

Thirdly, the smart contracts are not owned by any foreign national or sanctioned person, or by those who hold a certain crypto token in their wallets. Finally, the sanctions violate the First Amendment and block law-abiding citizens from using TC for socially valuable speech.

Grewal emphasizes that while privacy carries a risk of potential abuse, it is important to recognize that privacy is a right that should not be taken away from all due to the unlawful acts of a few. The plaintiffs in the lawsuit are among the thousands of law-abiding Americans who want to protect their privacy online but are unable to do so because of the government’s sanctions.

Coinbase’s support for the lawsuit shows its commitment to upholding the rights of its users to privacy and freedom of speech. The outcome of the lawsuit will have significant implications for the crypto industry, and the arguments being made could potentially set a legal precedent for future cases.