The U.S. Treasury Department has officially withdrawn its lawsuit! The Tornado Cash sanctions case comes to an end, and on-chain privacy tools are facing regulatory relaxation.

Key Event: The Treasury Withdraws Appeal, Sanctions Case Concluded Nearly five months after the U.S. Department of the Treasury lifted sanctions against the cryptocurrency mixer Tornado Cash, the federal agency has now officially withdrawn its appeal. According to Bloomberg Law, the U.S. Treasury has reached an agreement with the advocacy group Coin Center in Washington, D.C., to jointly request the termination of the appeal proceedings against Tornado Cash. The U.S. Eleventh Circuit Court of Appeals has approved the joint motion to dismiss the appeal.

Court documents show that both parties believe this appeal is moot and that the court's ruling will have no practical effect. Coin Center Executive Director Peter Van Valkenburgh confirmed on social media X that this joint motion marks the official end of the court battle regarding the legal basis for the Tornado Cash sanctions. He further pointed out that the government has no intention of continuing to pursue and defend its dangerous and overly broad interpretation of the sanctions law.

Background Review: Court Ruling on Excessive Powers Sanction In April of this year, a U.S. court made a key ruling, overturning the sanctions decision against Tornado Cash and prohibiting the Office of Foreign Assets Control (OFAC) from imposing sanctions on the mixer. The court ruled at the time that the decision by OFAC to impose sanctions on Tornado Cash violated the provisions of the Administrative Procedure Act and prohibited any subsequent imposition of similar sanctions. This ruling is seen as an important step in the process of crypto regulatory compliance.

Founder's Predicament: Roman Storm Still Faces Serious Criminal Charges Although Tornado Cash has achieved legal victories, its co-founder Roman Storm's legal troubles are far from over. His criminal trial for conspiracy to commit money laundering and evasion of sanctions will begin next week in New York. If convicted, Storm faces up to 45 years in prison (the prosecution has dropped the charge of “conspiracy to operate an unlicensed money transmitting business”). This case highlights the ambiguous legal responsibilities of cryptocurrency developers.

Market Reaction: TORN Token Short-term Surge Affected by this regulatory good news, the native token of Tornado Cash, TORN, has risen nearly 3% to a current price of $9.44, with its 24-hour trading volume surging by 154%. This is not the first time TORN has soared due to legal developments—previously, when the U.S. Court of Appeals lifted sanctions against Tornado Cash, its price skyrocketed by 180% in a single day.

Industry Signal: Is the US Crypto Regulatory Environment Easing? The Ministry of Finance's decision to drop the appeal comes as the U.S. regulatory stance on digital assets shows signs of softening. The market widely expects that, in the protracted Ripple vs. SEC case, both parties may also withdraw their respective appeals. Meanwhile, the crypto industry is closely watching a series of legislation that may be introduced in the coming weeks, and the supportive signals released by the Trump administration have also bolstered market optimism for easing crypto regulations.