Coinbase funds a lawsuit against the sanctions received by Tornado Cash.
Coinbase recently announced that it is funding and supporting a lawsuit filed by six individuals against the unjust sanctions imposed by the United States Treasury Department on Tornado Cash.
The lawsuit will ask the court to remove the technology from the sanction list of the U.S. Tornado Cash is a fully decentralized and open source software that operates on the blockchain of Ethereum.
It protects users' privacy by enabling them to deposit assets from one cryptocurrency address and withdraw them using another cryptocurrency address.
It is a cryptocurrency mixer platform that is widely used by numerous people to protect their privacy.
However, the sanctions imposed by the Treasury Department appear to be targeting an open source technology that helps people rather than the threat actors that committed the crime.
Coinbase Supports Tornado Cash
Coinbase is not just funding the lawsuit but also supporting it to protect further open-source projects and innovations.
Tornado Cash was sanctioned by the U.S. Office of Foreign Assets Control (OFAC) on August 8.
This decision comes after the software has been abused by numerous bad actors who use the platform to mix their cryptocurrency assets acquired through malicious activities.
The sanction was also imposed due to the recent hacking incident committed by the North Korean hacking group Lazarus, which is believed to have stolen more than $600 million in Axie Infinity by also using the platform.
However, the blockchain community did not respond positively to the sanctions that were imposed on Tornado Cash. This is because a large number of people were utilizing Tornado to increase the privacy and confidentiality of their Ethereum transactions.
Users usually use the platform to get a layer of privacy in their transactions, protect their security, and make donations anonymously without the eyes of threat actors.
According to BleepingComputer, Tornado Cash is a decentralized non-custodial software that provides a data protection solution that was built on the Ethereum blockchain. Given that it is an open-source project, this technology is maintained by a large number of volunteer developers from all over the world.
Tornado serves as a vital supplement to preserve users' need for privacy, and it does this by acting as an intermediary between the blockchain and the user.
Coinbase Believes in Defending the Privacy in Crypto
Coinbase believes that Treasury went much further and took the unprecedented step of sanctioning an entire technology instead of specific individuals.
The company sees two problems with the sanction. First, according to Coinbase CEO, Brian Armstrong, "there are legitimate applications for this type of technology and as a result of these sanctions, many innocent users now have their funds trapped and have lost access to a critical privacy tool."
Second, the cryptocurrency company believes the Treasury went even further and took the extreme step of sanctioning an entire technology rather than just the actors involved who committed the crime.
Another reason why the company is funding the lawsuit is to protect privacy in crypto. Lastly, Armstrong stated that sanctioning open-source code technology has a negative impact on innovation.
Developers might soon be discouraged from creating any open-source technology for fear that they might be sanctioned for things that are beyond their control. If these types of sanctions continuously occur, it may hamper innovation.
As stated by Armstrong, "one of the largest companies in crypto, we have a responsibility to defend the crypto industry against actions that go too far and treat crypto on an uneven playing field."
