Aisha, a young Syrian refugee I chatted with last year, represents everything that crypto was supposed to be. She relied on Bitcoin to receive remittances from family members living overseas, escaping the predatory banking sector that had let her people down. Crypto, for her, wasn’t an investment; it was a lifeline. What if the market suddenly cuts off that lifeline?

The Office of Foreign Assets Control (OFAC), the main sanctions enforcer for the Treasury, is increasing its jurisdiction into the crypto space. By the beginning of 2025, they’ve frozen well over $1.8 billion and counting in assets—something that should give every crypto user pause. We're not talking about catching a few bad apples; we're talking about a system that, with each passing day, looks more and more like the centralized financial behemoth it was supposed to disrupt.

Are We Rebuilding the Same Cage?

The narrative is simple: crypto is being used by bad actors – North Korean hackers laundering millions (an estimated $900 million in 2024 alone!), ransomware gangs demanding Bitcoin, and sanctioned regimes evading economic pressure. OFAC intervenes, freezes those wallets, and “safeguards” the financial system. Case closed, right?

Wrong. This narrative ignores the very foundation upon which crypto was built: decentralization. The idea was to create a system resistant to censorship and control, a system where financial freedom wasn't dependent on the whims of governments or corporations. By March 2025, three-quarters (76%) of U.S. crypto exchanges will be proudly marketing themselves as fully OFAC compliant. This change is paving the way for a system in which every electronically mediated transaction can be surveilled and seized at will.

Think about it: the speed at which exchanges now comply with OFAC sanctions has decreased to 72 hours. That’s actually faster than most banks do international wires! A truly decentralized currency should deliver that financial freedom. That value is forfeited if a government agency can just freeze your money on a whim, merely because they think you might be doing something wrong.

This isn't about supporting illicit activity. Understanding the harm of blanket sanctions and the dangers of centralized control is essential. These heavy handed measures do collateral damage to innocent lives like Aisha, who relies on crypto to make ends meet.

Centralization: The Real Vulnerability

The issue is not crypto, but the growing centralization of pathways to access. Centralized exchanges, custodial wallets, and even DeFi platforms that leverage centralized infrastructure turn into honey pots for regulatory overreach. Least of all OFAC, who in January 2025 issued its first-ever sanction against a DeFi protocol, freezing $150 million in assets. This highlights a critical flaw: DeFi, as it currently exists, is often not truly decentralized.

It’s a good time to ask ourselves what we’re building. Are we creating a new financial order, or are we just recreating a shadow banking industry that is simpler to regulate.

The increase in mixer targeting is another aspect that points to the issue. Mixers, like many technologies, can be abused for nefarious ends. They provide essential privacy protection for those living under repressive regimes and for anyone who wishes to protect their financial data from prying eyes. In cracking down on mixers we will be throwing the baby out with the bathwater and doing more harm than good by eroding financial freedom.

True Decentralization: Is There Still Hope?

The answer isn’t to give up on crypto—it’s to recommit to the core vision of what true decentralization can accomplish.

It's not a magic bullet. True decentralization is harder. It takes a higher level of technical expertise and commitment to overall security, as well taking personal responsibility for your own security. The opposite – a crypto system that’s merely another government control mechanism – is much more perilous.

  • Embracing Decentralized Exchanges (DEXs): DEXs offer a censorship-resistant way to trade crypto without relying on centralized intermediaries.
  • Prioritizing Privacy-Enhancing Technologies: Tools like CoinJoin, zk-SNARKs, and other privacy protocols can help protect users' financial information.
  • Supporting Community-Driven Governance: DAOs (Decentralized Autonomous Organizations) can give users more control over the development and operation of crypto platforms.

We need to demand better. Support projects that prioritize decentralization and privacy. Share your story, picture your future, or volunteer. Teach yourself and them about the power of financial freedom. In the meantime, change regulations at the FERC to preserve strong individual protections in siting.

Only 9% of blacklisted wallets have received a full freeze. This demonstrates more clearly than anything else that the fight for decentralization is very far from over. There are still opportunities to fight back against censorship and hold on to financial independence.

Just as all of us do, Aisha deserves a financial system that empowers her — not one that leaves her at the mercy of powerful institutions. The promise of crypto isn’t dead, but it will be unless we collectively do the hard work to defend it. Let’s work toward a more decentralized and truly inclusive future, decentralized enough to defend our financial freedom from bad actors on all sides. Let’s not overlook the seething fury and indignation we’ll no doubt encounter. We need to not go back to those ways, though!

Aisha deserves a financial system that empowers her, not one that leaves her at the mercy of powerful institutions. The promise of crypto is still alive, but it's up to us to fight for it. Let's build a truly decentralized future, one that protects financial freedom for everyone. And let's not forget the potential anger and outrage if we give up and fall back into the old way.