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The Treasury Department imposed sanctions on Tornado Cash last month over allegations they had laundered more than $7 billion worth of virtual currency. Some of those proceeds went to North Korean government-backed hackers, the department says.
Tornado Cash did not comment on the sanctions when they were imposed on Aug. 8 and representatives for the platform were not immediately reachable. Coinbase CEO Brian Armstrong said the Treasury Department had gone too far “by sanctioning an entire technology instead of specific individuals.”
Armstrong added: “[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.”
Armstrong said Coinbase was funding the lawsuit, which he said was brought by six people. The New York Times reported that the lawsuit was filed on Thursday in federal court in the Western District of Texas.
The Treasury Department did not immediately respond to a request for comment.
