Nearly every player in the cryptocurrency industry is watching closely as the U.S. Treasury attempts to dismiss the Tornado Cash lawsuit following its March 21, 2025 decision to remove the privacy protocol from its sanctions list. This move comes after a November 2024 federal appeals court ruling that found Treasury had exceeded its authority by sanctioning immutable smart contracts.
The crypto world holds its breath as Treasury tries to wave away the Tornado Cash saga after its regulatory overreach backfired.
The Treasury’s delisting of over 100 Ethereum addresses associated with Tornado Cash has created quite the stir—think of it as the regulatory equivalent of taking your ball and going home before the game officially ends. Their argument? The case is now “moot,” so why bother continuing with all this legal hullabaloo?
But Coinbase’s Chief Legal Officer Paul Grewal isn’t buying it. He’s pushing back using the “voluntary cessation” doctrine—basically saying “just because you stopped doing the thing we’re suing about doesn’t mean we should drop the lawsuit.” It’s like when your sibling stops punching you only because your parents walked into the room. While Tornado Cash faces legal challenges, other privacy coins continue to navigate the complex regulatory landscape of the crypto ecosystem.
The TORN token celebrated with a 60% price surge, despite the fact that co-founders Roman Storm and Roman Semenov remain in hot water. Storm is out on a $2 million bond awaiting his April trial, while Semenov has earned himself a spot on the FBI’s most wanted list—not exactly the kind of exclusivity crypto founders typically aim for. Adding to the founders’ legal woes, Alexey Pertsev was sentenced to 5 years and 4 months in prison back in May 2024.
This case has far-reaching implications for how decentralized technologies can be regulated. The Treasury has made it clear they’re still concerned about North Korean cyber activities and will continue monitoring transactions that might benefit bad actors.
Meanwhile, the crypto community is hailing this as a victory for privacy, while critics like Rep. Sean Casten call the decision “dangerous and irresponsible.” The Treasury’s action reflects their ongoing efforts to balance evolving technology and legal environments with national security priorities. As with most things in crypto, the debate boils down to a familiar tension: how to balance innovation and privacy with national security concerns.
