Coinbase Legal Chief Criticizes US Treasury Over Tornado Cash Lawsuit Dismissal
24.03.2025 08:28
Coinbase's Chief Legal Officer, Paul Grewal, has criticized the US Treasury for declaring the Tornado Cash lawsuit moot following the removal of Tornado Cash and related smart contract addresses from its sanctions list. The Treasury argued that delisting the mixer from the specially Designated Nationals list effectively resolves the case. However, Grewal contends that this approach is legally flawed, citing a lack of assurance that the misconduct will not reoccur—a principle highlighted in a 2024 Supreme Court decision regarding a similar issue. This disagreement follows a federal appeals court ruling that criticized the Treasury for overstepping its authority in sanctioning Tornado Cash. The legal dispute comes at a time of heightened scrutiny in the crypto space, with key figures associated with Tornado Cash facing ongoing legal challenges. This situation underscores the tension between regulatory agencies and crypto firms over legal interpretations and operational compliance, potentially impacting industry norms.
The news introduces regulatory and legal uncertainty for COIN, potentially leading to short-term volatility as market participants weigh the implications of a high-profile legal dispute. While immediate sentiment may be cautious due to perceived regulatory risks, the long-term outlook could improve if Coinbase successfully reinforces its legal position and clarifies its compliance framework. Key factors include the credibility of Grewal's critique, historical responses to similar legal challenges, and the balance between short-term market nervousness and potential regulatory reforms that could benefit Coinbase over time.