Post #7743

💣 Sanctions vs. Blockchain For most of the last century, sanctions were the ultimate lever of power. A few signatures could cut an entire country out of the global economy. Banks and SWIFT were inside jurisdictions, easy for governments to pressure. DeFi was designed to break that model. ➡️ Sanctions work through intermediaries - banks, payment rails, clearing systems. In DeFi there is no bank to call. Code is not a legal entity. ➡️ You can block a wallet, but the user will reappear with a new one. The harder the pressure, the more antifragile the system becomes. ➡️ North Korea shows this in practice. Under the toughest sanctions regime, Lazarus hackers built a cycle of theft, mixing, bridges, and cash-outs to fund the state. ➡️ Tornado Cash exposed the limits. OFAC blacklisted it in 2022, but by 2025 it was quietly removed. Regulators had to retreat to avoid setting a precedent that code itself can be sanctioned. Sanctions are not gone - they are evolving. The next stage is RegTech: AI systems that track flows across chains, assign “taint scores” to coins, and pressure stablecoin issuers, LPs, or validators. Most capital will move into regulated rails, while a smaller shadow system survives for privacy hardliners. The blacklist era is ending. The era of algorithmic sanctions has already begun. 🐴Powered by White Horse