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.
"Mending a statute's blind spots or smoothing its disruptive effects falls outside our lane, the ruling, handed down by a panel of judges, reads. “We decline the Department's invitation to judicial lawmaking—revising Congress's handiwork under the guise of interpreting it.
“Legislating is Congress's job—and Congress's alone."
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.
"No one wants criminals to use crypto protocols," Coinbase's Chief Legal Officer Paul Grewal wrote in a post to X on Tuesday. "Blocking open source technology entirely because a small portion of users are bad actors is not what Congress authorized.
"These sanctions stretched Treasury's authority beyond recognition, and the Fifth Circuit agreed," Grewal added....
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