Kristin Smit, CEO of the trade group, stated in a press release that regulators should not penalize crypto mixing tools but only punish bad actors.

The Blockchain Association filed an amicus brief to a lawsuit brought by the think tank Coin Center, against the Treasury Department’s Office of Foreign Asset Control and its sanctions watchdog.

Coin Center filed a lawsuit in October alleging that the U.S. Treasury Department imposed sweeping sanctions on Tornado Cash, a crypto mixer, which harmed Americans’ ability to conduct private transactions using the Ethereum network.

In a statement, Blockchain Association CEO Kristin Smit said: “It is important to understand that Tornado Cash can be used by anybody, even bad actors. To punish the tool for this, goes against the values upon which our country was founded.” “Blockchain Association supports Coin Center in advocating the responsible and legal use of blockchain technology. “Regulatory actions should be directed only at the bad actors who misuse this tool to achieve illegal ends.”

This is the second suit that the advocacy group has filed against Treasury Department and the second lawsuit over Tornado Cash sanctions.

OFAC sanctioned Tornado cash in August last year, claiming that North Korean hackers laundered hundreds millions of dollars worth of cryptocurrency through the mixer ever since it was launched. The federal government claimed that about 20% of Tornado Cash’s total transaction volume could be attributed to a hack.

The crypto industry strongly opposed the move. They pointed out that OFAC doesn’t normally sanction software, and Tornado Cash has no central operator.

The suit claimed that individuals could legitimately use privacy-enhancing tools such as Tornado Cash. OFAC’s sanctions on the privacy mixer, which pools funds to obscure the sender of a transaction, mean these individuals are now effectively exposing their entire transaction history for anyone who looks at network data.