Treasury Lifts Tornado Cash Sanctions; Texas Court Bars Reinstatement

What Happened

According to CoinDesk on April 29, 2025 in Federal — Treasury / E.D. Tex., After the Fifth Circuit held that immutable smart contracts could not be sanctioned as property under IEEPA, Treasury lifted Tornado Cash sanctions and a Texas court barred OFAC from reinstating them. The primary source is linked in the Source section below; readers are encouraged to review it directly for full context.

Why This Is Trending Now

The rulings are foundational precedent for how OFAC can — and cannot — sanction on-chain protocols.

Why Businesses Should Pay Attention

Protocol developers, front-ends, and infrastructure providers gained meaningful legal certainty.

Practical Considerations

Businesses may want to monitor the status of the underlying rule, filing, proceeding, or announcement as it evolves. Companies may need to evaluate how this development could interact with current contracts, licenses, disclosures, and compliance programs. The issue may raise questions around vendor obligations, reporting timelines, and internal policy updates that warrant discussion with qualified counsel.

Cogent Law Perspective

Cogent Law helps DeFi and infrastructure clients assess sanctions and BSA exposure against evolving precedent. The best next step is to speak with counsel about the facts specific to your organization.

Key Takeaways

• The rulings are foundational precedent for how OFAC can — and cannot — sanction on-chain protocols.
• Protocol developers, front-ends, and infrastructure providers gained meaningful legal certainty.
• Cogent Law helps DeFi and infrastructure clients assess sanctions and BSA exposure against evolving precedent.
• Review the primary source from CoinDesk for the full record before making any decisions.
• Speak with Cogent Law to discuss how this development may affect your business.

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