During oral arguments this week related to an appeal of the US Treasury’s designation of Tornado Cash as a sanctioned entity, a US circuit judge revealed an embarrassing detail.

On Tuesday, in a live proceeding of the appeal of that designation, Van Loon et al. v. U.S. Department of the Treasury et al., Judge Kurt Engelhardt asked lawyers why the US Treasury was only able to cite three examples of illicit use out of the millions of Tornado Cash transactions.

As reported by Law360, these three examples are not just small in the context of Tornado Cash’s enormous volume. Worse, these three justifications for the US Treasury’s designation of Tornado Cash might be even more embarrassing for another reason: A separate, pre-existing sanction might have prevented them.

All three transactions involved North Korea laundering financial assets in violation of pre-existing US Treasury sanctions. Indeed, North Korea has been a sanctioned entity since 2006 — formally, a Specially Designated National — prior to the addition of Tornado Cash to that sanctions list in August 2022.

Therefore, Judge Engelhardt specifically asked why North Korea’s pre-existing sanctions were insufficient for the legal purpose of preventing the illicit use Tornado Cash, especially if the US Treasury was only able to cite three examples involving North Korea.

To be clear, an entity that fails to prevent sanctions violations might itself become sanctioned. For example, the US Treasury might sanction a bank that attracts Iranian or Venezuelan money launderers, even though Iran and Venezuela are already sanctioned.

However, at least one judge in the three-judge panel for the Fifth Circuit is questioning whether a separate sanction was needed for Tornado Cash.

Read more: Coin Center loses Tornado Cash lawsuit, intends to appeal

The case is ongoing.

Entirely separate from this appeal, the US government is criminally prosecuting the co-founders of Tornado Cash Roman Semenov and Roman Storm. According to an indictment, they conspired to launder money, operate an unlicensed money-transmitting business, and transact with sanctioned entities.

Storm is fighting the charges while Semenov remains at large.