The U.S. Treasury's sanctions on Tornado Cash addresses sparked intense legal controversy. In 2022, OFAC blacklisted Tornado Cash, alleging it laundered over $7 billion, including funds tied to North Korea’s Lazarus Group. Critics, backed by Coinbase, argued OFAC overstepped its authority under the IEEPA, as Tornado Cash’s immutable smart contracts aren’t “property.” In November 2024, the Fifth Circuit ruled in Van Loon v. Treasury that these contracts don’t qualify as property, prompting Treasury to lift sanctions in March 2025. While privacy advocates celebrated, concerns persist about North Korean cybercrime. The case highlights tensions between regulating decentralized tech and national security, with ongoing legal battles against Tornado Cash founders complicating the debate.