Frederick Munawa Frederick Munawa is a Technology Reporter for Coindesk. He covers blockchain protocols with a specific focus on bitcoin and bitcoin-adjacent networks. Follow @ @FrederickMunawa on Twitter Crypto investment firm Paradigm published a nuanced legal argument amid concerns of potential sanctions by the U.
S. Treasury Department’s Office of Foreign Assets Control (OFAC) that would target blockchain base layer participants such as miners and validators. The post was published on Thursday and comes on the heels of a lawsuit filed by users who believe OFAC exceeded its authority when it sanctioned Tornado Cash smart contract addresses last month.
Paradigm acknowledged that sanctions can be an important tool to preserve national security, but said it believes base layer participants merely record and order data (which may include sanctioned addresses), but do not actively control sanctioned assets. Paradigm further suggested that stringent regulation would eventually push blockchain innovation offshore, making it more difficult to track crypto transactions for legitimate national security purposes. Paradigm explained that a blockchain “base layer” is essentially a “communications protocol and technology infrastructure,” much like the internet.
As such, the base layer must be free from censorship and preserve neutrality in order to maintain its utility as a public good. “It is widely accepted that the public switched telephone network and the switching centers that allow telephones around the globe to communicate are not expected to filter communications and exclude sanctioned persons. The same argument applies to the infrastructure of the internet.
Crypto’s base layer is no different,” the post read. Read More: Crypto Engineers, Investors Sue US Treasury Over Tornado Cash Sanctions DISCLOSURE Please note that our privacy policy , terms of use , cookies , and do not sell my personal information has been updated . The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies .
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Frederick Munawa Frederick Munawa is a Technology Reporter for Coindesk. He covers blockchain protocols with a specific focus on bitcoin and bitcoin-adjacent networks. Follow @ @FrederickMunawa on Twitter Frederick Munawa Frederick Munawa is a Technology Reporter for Coindesk.
He covers blockchain protocols with a specific focus on bitcoin and bitcoin-adjacent networks. Follow @ @FrederickMunawa on Twitter.
From: coindesk
URL: https://www.coindesk.com/policy/2022/09/09/crypto-investor-paradigm-argues-infrastructure-providers-should-not-be-subject-to-us-treasury-sanctions/?utm_medium=referral&utm_source=rss&utm_campaign=headlines
