> However, actually running the code to facilitate North Korean hackers launder money and personally profiting off of it?

Who is "running" the code?

The US government, to this date, has not made an argument that the developers of Tornado Cash, who have deployed the code to the Network, have committed a crime; at least one of them seems to be living in the US.

Nor has the government made an argument that operators of Ethereum nodes are committing a crime; they might also be considered to be running the code.

What the government has done is, through sanctions, instituted restrictions on Americans interacting financially with the smart contract. This has nothing to do with "running code"; this is operating under the assumption that the Tornado Cash smart contracts are an entity that is party to financial transactions.

Whether they have the power to sanctions non-entities like a smart contract is what the suit intends to find out.

The validating nodes "run" the code. And the majority of the nodes now won't process a tx to or from Tornado[0].

[0] https://www.trustnodes.com/2022/12/14/70-of-the-ethereum-net...

The number is actually 30% now (and seemingly more like 20% since yesterday's Shanghai for some reason):

https://www.mevwatch.info/

Using any encryption protocol increases the anonymity set of the protocol and therefore will inadvertently help criminals who are trying to stay anonymous. That is not an argument for doing away with constitutional rights and human rights.