- Tornado Cash’s native token TORN surged 382.9% following a U.S. Fifth Circuit Court ruling on smart contracts
- The court determined that immutable smart contracts cannot be classified as “property” under existing law
- Privacy-focused cryptocurrencies experienced significant gains, with several tokens rising 10-36%
- The ruling challenges the U.S. Treasury’s 2022 sanctions against Tornado Cash
- Major crypto industry figures praised the decision as a victory for privacy and decentralized technology
Court Ruling Sparks Privacy Token Rally
The cryptocurrency market witnessed a substantial surge in privacy-focused tokens after a landmark U.S. Fifth Circuit Court ruling determined that immutable smart contracts cannot be classified as "property" under current legislation. The decision triggered an immediate price reaction, with Tornado Cash’s TORN token reaching nearly $35 before settling at $17.17, representing a 382.9% increase according to CoinGecko data.
Privacy Coins See Widespread Gains
The ruling’s impact extended beyond TORN, creating a Ripple effect across privacy-focused cryptocurrencies:
- Railgun (RAIL): Up 36.6% to $0.98
- ZCash (ZEC): Increased 26.5% to $56.92
- Beam (BEAM): Rose 19.8% to $0.069
- Dash: Climbed 11.4% to $35.79
Legal Implications and Treasury Challenge
The court’s decision directly contradicts the U.S. Treasury Department’s August 2022 sanctions on Tornado Cash, which alleged the protocol’s involvement in $7 billion worth of illicit transactions, including those linked to north korea‘s Lazarus Group. The ruling emphasized that immutable smart contracts, operating autonomously without human intervention, cannot be subject to property-based sanctions under the International Emergency Economic Powers Act (IEEPA).
Industry Response
Leading cryptocurrency figures responded positively to the ruling:
"Immutable smart contracts are not property of any kind and therefore can’t be sanctioned," stated Peter Van Valkenburgh, director of research at Coin Center, in a tweet.
Coinbase Chief Legal Officer Paul Grewal celebrated the decision as an "historic win for crypto and all who care about defending liberty."
Uniswap Labs CEO Hayden Adam noted the significance of immutable smart contracts prevailing against the Treasury Department in court.
The market response and widespread industry support highlight the cryptocurrency sector’s sensitivity to regulatory developments, particularly those affecting privacy and decentralization principles.
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