Coinbase’s Legal Chief Takes on the Treasury: A Battle of Wits and Woes!

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In a most curious turn of events, the esteemed chief legal officer of Coinbase, one Paul Grewal, has taken it upon himself to cast a rather scathing light upon the U.S. Treasury’s audacious attempt to dismiss the Tornado Cash lawsuit, claiming, with a flourish, that the case is now rendered moot. Ah, the irony! 🎭

On the 21st of March, in a move that could only be described as a bureaucratic tango, the U.S. Department of the Treasury, in a fit of reconsideration, officially removed Tornado Cash and its associated smart contract addresses from its sanctions list. This was a reversal of the sanctions imposed back in the sultry days of August 2022 by the Office of Foreign Assets Control. One can only imagine the sighs of relief echoing through the halls of Coinbase! 😅

Regulators, in their infinite wisdom, had previously accused this platform of facilitating the rather unsavory art of money laundering, with transactions allegedly linked to the notorious Lazarus Group of North Korea fame. Quite the scandal, indeed!

This unexpected turn of events followed a ruling from a federal appeals court in November 2024, which, in a moment of clarity, determined that the Treasury had overstepped its bounds in sanctioning the immutable smart contracts of the crypto mixer. Who knew the law could be so… flexible? 🤔

In the wake of this ruling, the Treasury Department, in a statement that could only be described as a masterclass in bureaucratic doublespeak, declared that the case should now be considered resolved. They argued, with a straight face, that since Tornado Cash and its related smart contracts had been delisted, the lawsuit was effectively “moot.” Oh, the audacity! 😏

Yet, Grewal, ever the vigilant guardian of legal propriety, countered in a post on X on the 24th of March that this reasoning does not quite align with the law. He quipped, “Power does not recede voluntarily. It gasps and it gasps until it no longer can […] After grudgingly delisting TC, they now claim they’ve mooted any need for a final court judgment. But that’s not the law, and they know it.” A round of applause for Mr. Grewal, please! 👏

“Power does not recede voluntarily. It’s gasps and it gasps until it no longer can […] After grudgingly delisting TC, they now claim they’ve mooted any need for a final court judgment. But that’s not the law, and they know it.”

Paul Grewal, chief legal officer at Coinbase

According to our intrepid legal eagle, this situation is a classic case of voluntary cessation—a legal principle where a defendant, in a fit of desperation, ends a contested action to avoid a court ruling. However, this principle only holds water if there is a clear assurance that the behavior will not rear its ugly head again. Alas, Grewal contends that the Treasury has provided no such guarantee. How shocking! 😲

He even referenced a 2024 Supreme Court decision involving a U.S. citizen who had been unceremoniously removed from the No Fly List. The court, in its infinite wisdom, found that the case was not moot, as the government had failed to offer any assurance that the individual would not find themselves back on that infamous list. A lesson in accountability, perhaps?

While Tornado Cash may have been given a temporary reprieve from the sanctions list, Grewal pointedly noted that the Treasury has offered “no assurance” it won’t be added again. “That’s not good enough, and will make this clear to the district court,” he added, with a flourish that would make any playwright proud.

These recent developments come on the heels of Tornado Cash developer Alexey Pertsev’s release from prison, now under the watchful eye of electronic monitoring, after a Dutch court, in a moment of mercy, suspended his pretrial detention. He is now free to focus on appealing his conviction—how delightful! 🎉

Meanwhile, Tornado Cash co-founder Roman Storm is currently out on a $2 million bond, preparing for his trial in April. He, along with fellow co-founder Roman Semenov, has been charged by U.S. authorities for allegedly aiding in the laundering of over $1 billion in cryptocurrency through their platform. Quite the entrepreneurial spirit, wouldn’t you say? 💸

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2025-03-24 10:40