A U.S. court has ruled that a key component of sanctions against a cryptocurrency mixer linked to North Korean money laundering is unlawful, a move privacy advocates have welcomed as a victory over government overreach targeting open-source tools.

The U.S. Court of Appeals for the Fifth Circuit said in its judgment on Tuesday that the Treasury’s Office of Foreign Assets Control (OFAC) “overstepped its congressionally defined authority” by sanctioning Tornado Cash’s “immutable smart contracts,” referring to autonomous pieces of code that cannot be altered or removed from the blockchain. 

The three-judge panel reversed a lower court’s earlier decision, which backed