The Fifth Circuit Court's ruling on Tornado Cash on Wednesday has triggered widespread optimism, with decentralized protocols on Ethereum and privacy-focused tokens seeing significant gains.
On Tuesday, the court found that immutable smart contracts aren't property and can't be sanctioned under existing laws, signaling what some observers claim as a major win for privacy advocates.
"While the ruling does not endorse money laundering, it establishes a precedent allowing programmers to develop and release smart contract protocols without fear of sanction, provided they do not charge fees," 10X Research said in a note to investors on Wednesday.
The move could also provide developers with more clarity about what they can build without falling into the regulatory crosshairs, particularly on Ethereum, which plays host to the majority of decentralized applications.
"Privacy won. Smart contracts won. Tornado Cash won. And OFAC lost," Balaji Srinivasan, Coinbase's former CTO and prominent crypto entrepreneur, said Wednesday on X, formerly Twitter.
TORN Jumps 380%, Privacy Coins Railgun, Zcash Surge After Tornado Cash Ruling
Crypto mixer Tornado Cash just flipped the script on the Treasury—and privacy coins are reaping the rewards. Tornado Cash’s native token, TORN, soared to highs of almost $35 Tuesday morning, after the U.S. Fifth Circuit Court ruled that immutable smart contracts cannot be classified as “property” under existing law. At time of publication, TORN has pulled back from its local high to trade at $17.17—up 382.9% on the day, per CoinGecko data. The court's landmark decision struck a blow to the U.S....
Crypto markets immediately took inspiration from the news: TORN, Tornado Cash's native token, surged over 380% early Thursday.
While privacy coins as a category have since tapered off to less than 2% in total gains over the past 24 hours, decentralized finance's market cap has jumped 8.2% and a further 21.5% on the week, data from CoinGecko shows.
Among the largest gainers is Uniswap (UNI), up 11% on the day to an eight-month high just above $12.50. Aave (AAVE) and Ethena (ENA) have also hit their strides, up 8.6% and 23%, reaching their highest point in 2.5 years and five months, respectively.
Bitcoin and Dogecoin Rebound as Ethereum Hits 5-Month High Price
Bitcoin jumped back above $97,000 per coin on Wednesday, suggesting renewed investor optimism around the coin after it took a plunge earlier this week. The leading cryptocurrency touched $97,360 earlier Wednesday, but has since dipped and is now trading for $96,320, data from CoinGecko shows. The coin was fast approaching $100,000 last week but stopped short, ultimately still hitting a new all-time high of $99,645. Over a 24-hour period, Bitcoin is now up by more than 5%. It's not the only digi...
"As Ethereum remains the leading blockchain for DeFi, this decision is viewed positively for the broader DeFi ecosystem and other protocols, particularly on the Ethereum network. This could have enormous implications," 10X Research wrote.
Fifth Circuit Rules OFAC Overstepped in Sanctioning Tornado Cash's Immutable Smart Contracts
The U.S. Fifth Circuit Court ruled Tuesday that the Treasury overstepped by sanctioning Tornado Cash’s immutable smart contracts, stating the autonomous software cannot be classified as property. The Fifth Circuit held that when smart contracts are immutable—meaning no entity can modify or control them—they cannot be classified as "property" subject to sanctions under existing law. The decision reverses a lower court ruling and marks a significant win for privacy advocates and blockchain develop...
Meanwhile, Alexey Pertsev, the Tornado Cash developer found guilty by a Dutch court in May over a money laundering case, remains behind bars.
"I am sad to announce that, despite our best efforts, the court decided to prolong my pre-trial detention,” Pertsev said on Twitter last week. “This decision significantly complicates my ability to prepare for the appeal, but I remain determined to continue fighting for justice."
Edited by Sebastian Sinclair
