Molly WhiteThe 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.
Some background on the Tornado Cash issue, and some of my thoughts on it from earlier this year: https://www.citationneeded.news/tornado-cash/
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)
aeva@molly0xfff I hadn't really had cause to consider how I feel about financial privacy before. I feel nothing about little criminals using computers to do little crimes, but I feel a deep sadness that basically every purchase I make with a credit card is aggregated and sold to advertisers: a widespread practice that has caused real harm to society that we're meant to just accept for some reason.
@molly0xfff I think corporations and the ultra wealthy should be pinned like a bug though. Their hoarding of money has significant detrimental effects on everyone worldwide and because of that we all have a right to know what they have and what they're doing with it. The little money us little people are allowed to have is no consequence to anyone, and should be nobody's business. Our actual financial privacy is inverted to what it should be.
@molly0xfff someones gotta tell the "oh noo money laundering" guys about shell corporations
Howard Chu @ Symas@molly0xfff Monero preserves user privacy and has none of these gray areas. No central website from which users access the network, etc. etc...
Xavier Ashe 
@molly0xfff Does this settle things, or will this be challenged in higher courts?
SpaceLifeFormWell, it is the Fifth Circuit, so it makes sense. Not.
⚯ Michel de Cryptadamus ⚯@molly0xfff the absolute nutjobs on the 5th circuit strike again... i guess the only hope is that the 5th circuit is so far off the reservation that even the conservative SCOTUS quite often reverses them.
FeralRobots@molly0xfff wait a sec: if they contracts can't be owned, how can the assets be "theirs" to retrieve?
@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.
SΞRΞNO@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?
@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).
@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?
@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)
@molly0xfff that's ok; like most smart contracts I'm sure it's capable of being pwned.