A federal judge in Texas has sided with the United States Department of the Treasury by granting a motion for summary judgment in a lawsuit concerning Tornado Cash brought by six individuals backed by crypto exchange Coinbase.
In an Aug. 17 filing in the U.S. District Court for the Western District of Texas, Judge Robert Pitman denied a motion filed in April by plaintiffs Joseph Van Loon, Tyler Almeida, Alexander Fisher, Preston Van Loon, Kevin Vitale and Nate Welch requesting partial summary judgment in a case over controversial mixer Tornado Cash. Pitman, however, granted a similar motion filed by the U.S. Treasury Department.
“This case is about Tornado Cash — but the parties disagree on how to characterize Tornado Cash,” said Pitman. “Plaintiffs argue that [Treasury’s Office of Foreign Assets Control’s] designation of Tornado Cash exceeds the Department’s statutory authority over foreign nationals’ interests in property and violates the Free Speech Clause. […] The government, on the other hand, argues that Tornado Cash is an entity that may be designated and that it has a property interest in the smart contracts.”
In August 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) added Tornado Cash to its Specially Designated Nationals list. Many crypto users criticized the move as an overreach of authority. The six aforementioned individuals, with the support of Coinbase, filed a lawsuit against the government department in September 2022, seeking to reverse the designation. Crypto advocacy group Coin Center followed with its own suit in October.
Pitman largely dismissed the plaintiffs’ arguments, ruling that Tornado Cash was “an entity that may be designated per OFAC regulations,” and its addition to a list of sanctioned entities did not exceed Treasury’s statutory powers and was “not plainly inconsistent with its regulations.” The ruling claimed developers could analyze and teach the code behind the mixer but not “execute it and use it to conduct cryptocurrency transactions.”
Coinbase chief legal officer Paul Grewal reacted to the judge’s decision on X (formerly Twitter), saying the exchange intended to support an appeal to the Fifth Circuit.
Rights are rarely secured on a path that is always ⬆️ and ➡️. We continue to believe Plaintiffs’ challenge to OFAC’s Tornado Cash action is right. We’ve always known that Fifth Circuit review is required to resolve these issues, and we continue to support them on appeal. 1/4 pic.twitter.com/Tz8FkFCSf2
Coinbase is currently embroiled in a civil case with the U.S. Securities and Exchange Commission (SEC) filed in June. Though the OFAC and SEC cases are significantly different, Grewal has made similar arguments in both lawsuits, claiming in the latter the commission’s enforcement action against the crypto exchange represented an overreach in its authority granted by Congress.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.