The US Treasury Department has dropped cryptocurrency mixer Tornado Cash from its sanctions list, the agency said on March 21. 

The removal follows a January ruling by a US appeals court, which said the Treasury’s Office of Foreign Assets Control (OFAC) cannot sanction Tornado’s smart contracts because they are not the property of any foreign national. 

According to the January court ruling, “Tornado Cash’s immutable smart contracts (the lines of privacy-enabling software code) are not the ‘property’ of a foreign national or entity, meaning […] OFAC overstepped its congressionally defined authority.”

In a March 21 statement, the Treasury said OFAC removed several dozen Tornado-affiliated smart contract addresses on the Ethereum blockchain network from its sanctions list. 

Tornado’s native token, Tornado Cash (TORN), is up around 60% on the news, according to data from CoinMarketCap. 

As of March 21, TORN has a market capitalization of around $73 million and a fully diluted value (FDV) of nearly $140 million, the data shows. 

OFAC is the Treasury’s office for administering economic and trade sanctions on states and foreign nationals.

Tornado Cash lets users pool crypto deposits into a mixer and then withdraw it later to different wallet addresses, making the original funding source difficult to track.

Related: Tornado Cash dev Alexey Pertsev’s bail a ‘crucial step’ in getting fair trial, defense says

Money laundering allegations

In August 2022, OFAC sanctioned Tornado Cash after alleging the blockchain protocol helped launder cryptocurrency stolen by Lazarus Group, a North Korean hacking outfit. 

Lazarus Group has allegedly stolen billions of dollars in crypto through various cyberattacks.

In February, Lazarus was accused of pilfering $1.4 billion from digital asset exchange Bybit in the largest-ever crypto exploit.