From decrypt by Vismaya V

Crypto mixing service Tornado Cash. Image: Shutterstock

Crypto mixer Tornado Cash just flipped the script on the Treasury—and privacy coins are reaping the rewards.

Tornado Cash’s native token, TORN, soared to highs of almost $35 Tuesday morning, after the U.S. Fifth Circuit Court ruled that immutable smart contracts cannot be classified as “property” under existing law.

At time of publication, TORN has pulled back from its local high to trade at $17.17—up 382.9% on the day, per CoinGecko data.

The court's landmark decision struck a blow to the U.S. Treasury Department’s sanctions authority, triggering a market-wide rally in privacy-focused cryptos. Railgun (RAIL) surged 36.6% to $0.98, Zcash (ZEC) climbed 26.5% to $56.92, Beam (BEAM) increased 19.8% to $0.069, and DASH jumped by 11.4% to $35.79, according to CoinGecko data.

The ruling overturned a lower court’s decision, stating that Tornado Cash’s immutable smart contracts—autonomous lines of code that execute without human intervention—are not “property” and thus fall outside the International Emergency Economic Powers Act (IEEPA).

It also emphasized that immutable smart contracts cannot be owned or controlled, making them exempt from property-based sanctions.

This directly challenges the Treasury’s August 2022 designation of Tornado Cash, which alleged the protocol facilitated over $7 billion in illicit transactions, including funds tied to North Korea’s Lazarus Group.

  Crypto leaders have hailed the ruling as a pivotal moment for the space, with Peter Van Valkenburgh, director of research at advocacy group Coin Center, praising the legal clarity provided by the decision. “Immutable smart contracts are not property of any kind and therefore can’t be sanctioned,” Van Valkenburgh wrote on Twitter.  

The ruling’s impact was amplified on social media, where crypto leaders celebrated the court’s acknowledgment of decentralized technology.

Coinbase Chief Legal Officer Paul Grewal tweeted that, “Privacy wins," adding that, the verdict was an “historic win for crypto and all who care about defending liberty.”

Uniswap Labs CEO Hayden Adam tweeted, “Immutable smart contracts just beat the Treasury Department in court. Incredible to see the degree to which crypto is killing it in federal courts.”

For now, privacy coins are enjoying their moment in the spotlight—an indicator of how closely the crypto market ties itself to legal and regulatory outcomes.