Top Highlights

• The U.S. Fifth Circuit Court ruled Tuesday that the Treasury overstepped by sanctioning Tornado Cash’s immutable smart contracts, stating the autonomous software cannot be classified as property.
• The Fifth Circuit held that when smart contracts are immutable—meaning no entity can modify or control them—they cannot be classified as "property" subject to sanctions under existing law.
• The decision reverses a lower court ruling and marks a significant win for privacy advocates and blockchain developers seeking clarity to build similar products, according to industry stalwarts.
• As a result, these contracts remain accessible to anyone—including sanctioned North Korean entities—regardless of the Treasury's Office of Foreign Assets Control (OFAC) designation,
• Immutable smart contracts at the center of the case "are not property because they are not capable of being owned," noting that over 1,000 participants engaged in a "trusted setup ceremony" that permanently removed any ability to update or control the code, the court found.

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