PANews reported on November 27 that the U.S. Court of Appeals for the Fifth Circuit overturned the lower court's decision and determined that the Office of Foreign Assets Control (OFAC) exceeded its authority when sanctioning Tornado Cash's immutable smart contracts, which is a major victory for the protocol and its users. The three-judge panel pointed out in the ruling that although the Treasury Department has the authority to take action against "property", Tornado Cash's smart contracts are immutable and cannot be controlled or owned, so they do not constitute property under the International Emergency Economic Powers Act (IEEPA).

Coinbase Chief Legal Officer Paul Grewal said that these smart contracts must now be removed from the sanctions list and that U.S. users will once again be allowed to use the privacy-preserving protocol. The Court of Appeals has instructed the District Court for the District of Texas to grant a partial motion for summary judgment filed by plaintiff-appellant Joseph Van Loon et al.