Tornado Cash Ruling Leads to Market-Wide DeFi Token Surge

Views: 1234

TLDR

Fifth Circuit Court ruled that immutable smart contracts can’t be sanctioned as property, favoring Tornado Cash TORN token surged over 380% following the ruling, reaching nearly $35 before settling at $17.17 DeFi market cap increased by 8.2% daily and 21.5% weekly after the decision Major DeFi tokens like Uniswap, Aave, and Ethena reached multi-month highs Tornado Cash developer Alexey Pertsev remains in custody despite the favorable ruling

The Fifth Circuit Court delivered a landmark ruling on Tuesday, determining that immutable smart contracts cannot be classified as property or be subject to sanctions under current laws. The decision directly challenges the U.S. Treasury’s previous sanctions on the cryptocurrency mixer Tornado Cash.

The court’s ruling specifically addressed the nature of autonomous software in the blockchain space, stating that when smart contracts are immutable – meaning no entity can modify or control them – they fall outside the traditional definition of property that can be sanctioned under existing legal frameworks.

Markets responded swiftly to the news, with Tornado Cash’s native token TORN experiencing a dramatic price increase. The token surged to almost $35 on Tuesday morning, marking a 380% gain. By the time of reporting, TORN had settled at $17.17, still maintaining a 382.9% increase over its pre-ruling price.

The decision sparked a broader rally across the decentralized finance (DeFi) sector. The total DeFi market capitalization rose 8.2% in 24 hours and accumulated a 21.5% increase over the week, according to data from CoinGecko.

Torn Price on CoinGecko

Major DeFi protocols recorded notable gains following the announcement. Uniswap’s UNI token climbed 11% to reach $12.50, its highest point in eight months. Similarly, Aave’s AAVE token rose by 8.6%, while Ethena’s ENA token increased by 23%, both reaching multi-month highs.

Former Coinbase CTO Balaji Srinivasan celebrated the ruling on X (formerly Twitter), declaring, “Privacy won. Smart contracts won. Tornado Cash won. And OFAC lost.”

Investment research firm 10X Research noted in their analysis that while the ruling does not endorse money laundering, it creates a precedent that allows programmers to develop and release smart contract protocols without fear of sanctions, provided they do not charge fees.

The impact appears particularly positive for the Ethereum network, which hosts the majority of decentralized applications and DeFi protocols. The ruling provides developers with clearer guidelines about … Read More