The Fifth Circuit has just opined that the smart contracts that comprise the Tornado Cash cryptocurrency tumbler are "not property because they are not capable of being owned", and thus cannot be sanctioned by OFAC.
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The Fifth Circuit has just opined that the smart contracts that comprise the Tornado Cash cryptocurrency tumbler are "not property because they are not capable of being owned", and thus cannot be sanctioned by OFAC.
#crypto #cryptocurrency #TornadoCash
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Some background on the Tornado Cash issue, and some of my thoughts on it from earlier this year: https://www.citationneeded.news/tornado-cash/
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Here's the full decision: https://storage.mollywhite.net/pdfs/TornadoCash5Cir.pdf
(CourtListener/RECAP doesn't like it because PACER has a split PDF, apologies)
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@molly0xfff Does this settle things, or will this be challenged in higher courts?
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@Xavier TBD!
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@molly0xfff wait a sec: if they contracts can't be owned, how can the assets be "theirs" to retrieve?
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@FeralRobots think of the smart contracts as a machine that allows you to put $ in and in exchange you get a unique ticket. when you put that ticket back in the machine at some later point, it gives you the same amount of $ back. they're saying that the machine itself can't be controlled (namely, it can't be made to exclude any particular person from putting money or codes into it). the contents of the machine are a different question.
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@molly0xfff Two questions arise now that I've read the decision.
1. Why was the lawsuit filed within the Fifth Circuit?
2. To what extent does the court overstate the actual immutability of the smart contracts at issue?
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@molly0xfff I wonder one of the judges is free to officiate Lord Wheatherby's wedding, or if they only commit to the bit when playing pretend with cryptobros.
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@sereno
1. The original lawsuit was filed in the Western District of Texas (quite deliberately, I'm sure, by finding a supposedly harmed plaintiff who resided there). Thus the appeal went to the Fifth Circuit.2. I wouldn't say they do, the technical details seem accurate to me (at least at first read).
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@molly0xfff 1. That was certainly my assumption.
2. That's something, at least. I don't know enough about the tech, but I take it there's no way to e.g. destroy an immutable smart contract short of wiping out the blockchain it's minted on?
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@sereno at least in the way the court has defined "immutable" here. (a lot of crypto projects are, unsurprisingly, a lot looser with their definitions)
