While this decision marked a notable shift, Coinbase’s Chief Legal Officer, Paul Grewal, has cautioned that this move does not guarantee the platform’s long-term freedom from restrictions. He highlights the possibility that the U.S. government could reimpose similar sanctions in the future.
Grewal argues that the reversal of sanctions is not a definitive legal resolution, as the Treasury has not promised that it won’t reinstate the restrictions at a later date.
He points out that, under the voluntary cessation doctrine, simply removing sanctions does not eliminate the potential for future enforcement. Citing past legal cases, Grewal compares the Treasury’s actions to other instances where the withdrawal of sanctions did not prevent re-imposition.
The removal of the sanctions was partly the result of legal challenges and pressure from the crypto community. However, Grewal emphasizes that the U.S. Treasury may still hold the authority to reintroduce these restrictions whenever it deems necessary.
He also advocates for a clear judicial ruling to prevent arbitrary future sanctions and avoid potential overreach by the Treasury. Grewal urges the district court to take decisive action to formally invalidate the Treasury’s designation of Tornado Cash as a sanctioned entity, claiming that the Treasury’s recent actions have been chaotic and inconsistent with judicial orders.
While the lifting of sanctions is a win for Tornado Cash users and the broader crypto space, the uncertainty surrounding future regulatory action remains. Industry figures like Grewal are calling for a concrete legal decision to ensure the long-term viability of decentralized finance (DeFi) platforms and privacy technologies, as the future of Tornado Cash hangs in the balance.
Editorial Team
Reporter at Coindoo
Source: https://coindoo.com/legal-experts-caution-against-permanent-relief-for-tornado-cash-after-treasurys-sanction-lift/