TORN Spikes 116% as US Court Reverses OFAC Sanction Against Tornado Cash

The price of TORN, the Tornado Cash governance token, spiked over 116% after a U.S. court reversed sanctions imposed against the famous crypto mixing protocol.

Court Overturns OFAC Sanction 

In a landmark ruling yesterday, the U.S. Court of Appeals for the Fifth Circuit reversed the OFAC sanction against Tornado Cash. It remanded the case to the District Court for the Western District of Texas for further proceedings. 

For context, six Tornado Cash users filed an appeal against OFAC’s sanction on November 26, 2024. At the time, these users alleged that the OFAC overstepped its congressional authority by sanctioning Tornado Cash

Following the appeal, the Appeals Court reversed the OFAC sanction against Tornado Cash. 

Previous Sanctions on Tornado Cash 

For context, recall that Tornado Cash, which launched in 2019, faced heavy scrutiny during its early days. Critics accused its co-founder, Alexey Pertsev, of facilitating money laundering on behalf of bad actors. 

Amid these criticisms, the United States Treasury’s Office of Foreign Assets Control (OFAC) placed sanctions on the protocol and blocked it in 2022. 

Specifically, the federal agency accused the crypto mixing protocol of helping the infamous North Korean Lazarus Group facilitate money laundering. This group has been linked to major crypto-related heists in the past. 

According to OFAC’s complaint, the Lazarus Group laundered nearly half a billion dollars ($455 million) using Tornado Cash’s mixing protocol. 

Following the sanctions, U.S. authorities convicted Pertsev of laundering $1.2 billion through the platform. It is worth noting that Tornado Cash users conducted these transactions.  

A panel of judges at the s-Hertogenbosch Court of Appeal subsequently sentenced him to five years and four months in jail. This sentencing took place on May 14, 2024, despite Pertsev’s plea for leniency. 

Tornado Cash Founder Still in Custody 

Now, despite the Court reversing the OFAC sanction, Pertsev is still in custody, as his case is different from the OFAC sanction. He was convicted of money laundering-related charges despite pleading not guilty during the trial. 

In his defense, Pertsev argued that he cannot be held responsible for users’ illicit activities on Tornado Cash. However, the panel of judges dismissed this defense, emphasizing that he and other founders should have put necessary measures in place to prevent illicit actors from facilitating money laundering activities through the platform. 

TORN Spikes 116% 

Meanwhile, the reversal of the OFAC sanction caused the price of TORN to spike massively. According to CoinGecko, TORN’s price soared to nearly $22 in the early hours of today, with the asset soaring by 116% in 24 hours at the time of the post.  

LATEST: $TORN skyrocketed as high as $21.91 today as the Texas District Court officially ordered sanctions against @TornadoCash to be reversed.

It’s currently up 116.2%, trading at $17.04 📈 pic.twitter.com/XYhMviEJKY

— CoinGecko (@coingecko) January 22, 2025

TORN continued its rally hours later, rising to a two-year high of $25.48 in the hours leading up to press time. Currently, TORN is trading at $21.41, with a 24-hour growth of 172.7%. Despite its surge, it is still down 95% from its all-time high (ATH) of $436.16.