- The US Treasury removed Tornado Cash from the sanctions list, claiming the lawsuit is now moot.
- Coinbase CLO Paul Grewal says the case isn’t moot without Treasury’s guarantee against re-sanctioning.
The U.S. Treasury has dropped Tornado Cash from its sanctions list, claiming this makes an ongoing lawsuit against it irrelevant. However, Coinbase’s Chief Legal Officer, Paul Grewal, argues this move is a legal tactic to avoid a final court judgment—one that lacks any real assurance for the future.
Grewal criticized the Treasury’s attempt to dismiss the case, saying it’s a classic example of “voluntary cessation”—where a defendant stops a contested action just to avoid legal consequences. He pointed out that the government hasn’t given any assurance that Tornado Cash won’t be sanctioned again in the future.
Power does not recede voluntarily. It’s gasps and it gasps until it no longer can. @USTreasury filed yet another late Friday pleading against Tornado Cash. After grudgingly delisting TC, they now claim they’ve mooted any need for a final court judgment. But that’s not the law,… pic.twitter.com/Je8KD51X0q
— paulgrewal.eth (@iampaulgrewal) March 23, 2025
Coinbase CLO Grewal Warns of Potential Re-Sanctioning
The Treasury first sanctioned Tornado Cash in August 2022, alleging that North Korea’s Lazarus Group used it to launder stolen crypto. However, a November 2024 court ruling found that the agency had exceeded its authority by sanctioning the protocol’s immutable smart contracts. Following this, on March 21, the Treasury officially removed the crypto mixer and its associated wallet addresses from the sanctions list. Now, they’re arguing that the lawsuit should be dropped since the sanctions no longer apply.
But Grewal isn’t convinced. “Power does not recede voluntarily. It gasps and it gasps until it no longer can,” he wrote on X, criticizing the Treasury’s attempt to avoid legal scrutiny.
Grewal also highlighted a past Supreme Court ruling where a citizen removed from the No Fly List was still allowed to continue their case, as there was no guarantee they wouldn’t be put back on the list. He says the same applies here—without a clear promise from the Treasury, Tornado Cash could just be sanctioned again.
“This isn’t good enough,” Grewal stated, adding that Coinbase will make this clear to the district court.
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