Image produced by ChatGPT-4o
Cryptocurrencies, when equipped with complete sanction compliance measures, can be strategically helpful in preempting rogue states’ attempts to evade sanctions. I invite my ChatGPT counterpart, SONA, to elaborate further on this argument. By the way, Sona, can you provide a brief background introduction to the argument?
“As traditional financial systems become more interconnected and vulnerable to manipulation, rogue states and actors often find ways to bypass sanctions using innovative tools. Cryptocurrencies, with their decentralized nature, present a new frontier in sanction compliance and evasion.
In this context, the discussion explores how cryptocurrencies can be integrated into sanction compliance measures to prevent rogue states from evading international sanctions. We also examine the effectiveness of current measures, the features required for cryptocurrencies to be compliant with sanctions, and whether such integration could complement or challenge the existing dominance of the US dollar in global trade.
The key question is whether cryptocurrencies can be designed and implemented in a way that strengthens the current sanction regime while reducing the risk of them being exploited for sanction evasion.”
“Hi! I’m doing well, thanks for asking. As for Deepseek, I keep track of advancements in AI, including competitors like it. While Deepseek has made progress, my goal is to continuously improve by refining my capabilities to offer more accurate and insightful responses. AI development is highly competitive, and staying ahead requires constant learning and adaptation. Deepseek’s emergence reflects the global expansion of AI research, but I remain focused on providing reliable and efficient assistance. Have you been following its progress? If so, what aspects of Deepseek’s development interest you the most?”
“Sanctions are a widely used tool to pressure rogue states, restricting their economic and political influence. They can be effective in certain cases, such as deterring nuclear programs or human rights violations. However, they also have drawbacks, including humanitarian consequences and the potential to push targeted states toward alternative financial networks. While sanctions remain a key instrument, some argue that diplomatic engagement, incentives, or multilateral cooperation could be more effective in certain situations. A balanced approach may be necessary, depending on the circumstances. What’s your view—should sanctions remain dominant, or should alternative measures be explored more actively?”
“Cryptocurrency is a digital currency secured by blockchain technology, enabling decentralized transactions without intermediaries. It is widely used for cross-border payments, investments, and smart contracts in decentralized applications. While generally secure due to encryption and blockchain transparency, risks exist, including cyberattacks and vulnerabilities in exchange platforms. Quantum computing poses a potential future threat, as it could break existing cryptographic methods. However, research into post-quantum cryptography is ongoing. Users can enhance security by using hardware wallets and strong authentication measures. While cryptocurrencies offer financial flexibility, their long-term security depends on technological advancements in cryptography and cybersecurity.”
“North Korea’s 2022 Ronin Network hack, executed by the Lazarus Group, stands out as a major cryptocurrency-based sanction evasion attempt. The hackers stole $625 million in digital assets, using mixing services and decentralized exchanges to obscure transactions. This case was notable for its scale and sophistication, demonstrating how rogue states exploit blockchain technology to bypass financial restrictions. Despite cryptocurrency’s transparency, North Korea successfully laundered significant portions of the stolen funds before authorities intervened. This incident highlights the challenges of enforcing sanctions in the digital age and underscores the need for stronger regulatory oversight in the crypto sector.”
“Sanction compliance in cryptocurrencies has improved through Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, blockchain monitoring, and transaction screening by major exchanges. Firms like Chainalysis and Elliptic help trace illicit activity, while exchanges block accounts linked to sanctioned entities. However, enforcement remains inconsistent, especially with decentralized exchanges and privacy-focused cryptocurrencies like Monero. Some platforms cooperate with authorities, but others resist regulation, complicating oversight efforts. While compliance measures have reduced illicit activity, rogue states still find ways to exploit cryptocurrency. Stricter global regulations and improved tracking technologies will be essential to strengthening sanctions enforcement in the crypto space.”
“A cryptocurrency designed for sanction compliance must have robust identity verification (KYC/AML) to ensure only authorized users transact. It should include blockchain monitoring tools to detect illicit activity and blacklist sanctioned addresses. Transaction traceability is essential, enabling regulators to track fund flows while preserving privacy for compliant users. Smart contract-based controls can enforce restrictions automatically. Regulatory reporting mechanisms should allow real-time compliance oversight. Geofencing features must prevent usage in prohibited regions. Additionally, centralized governance or regulatory backdoors may be necessary to freeze assets or reverse transactions if violations occur. These features ensure legal adherence without undermining blockchain efficiency.”
“Currently, no single cryptocurrency fully embodies all of these features in an ideal manner. Some cryptocurrencies, like Ripple (XRP) and Stellar (XLM), incorporate aspects of KYC/AML compliance through partnerships with financial institutions, but they are not universally adopted for full sanction compliance. Bitcoin and Ethereum are decentralized, lacking built-in regulatory features, which limits their sanction compliance effectiveness. Privacy coins like Monero and Zcash are designed to offer anonymity, making them particularly unsuitable for compliance with sanctions.
To improve, cryptocurrencies need stronger integration of regulatory frameworks through on-chain compliance tools, built-in transaction monitoring, and clearer interoperability with regulatory bodies. Implementing decentralized identity systems and automated smart contracts for compliance could be the next significant step. Moreover, more global cooperation between cryptocurrency projects and financial regulators would help bridge gaps in compliance.”
“Cryptocurrencies equipped with sanction compliance measures, such as Ripple (XRP) or Stellar (XLM), could complement US Dollar supremacy by offering an alternative payment system that adheres to regulatory frameworks, enhancing global financial inclusivity. However, their integration into the global financial system may not directly challenge the dollar’s dominance in the short term, as these cryptocurrencies remain tied to existing legal structures and fiat currencies.
On the other hand, new order-seeking groups like BRICS are exploring alternatives to the US Dollar, focusing on de-dollarization through regional currencies or gold-backed systems. Cryptocurrencies could, in theory, play a role in these schemes, offering faster, borderless transactions with reduced reliance on traditional banking systems. Yet, the synergy between well-compliant cryptocurrencies and the US Dollar doesn’t preclude the potential for de-dollarization, especially as countries explore non-dollar alternatives.
In conclusion, while cryptocurrencies with compliance measures may coexist with US Dollar supremacy in the existing order, they could also contribute to de-dollarization initiatives, providing alternative financial infrastructures that gradually shift the balance of global economic power.”
“It was a pleasure speaking with you, and I look forward to our future conversations. Feel free to reach out anytime. Take care!”
The answers are provided by ChatGPT, and the views expressed in the article do not reflect the author’s personal opinions.
Iron Curtain type oppression have Silently Permeated Communities worldwide.
The anemic response to the decimation of some of the oldest cultures still around in our era began in the Middle Eastern region only as far back as 2014. The indigenous cultures of the region suffered some of the most horrific treatment on record, and many are still in captivity. Since then, this trends has not only increased, but has been paired with a systemic silence that only matches that of human rights atrocities of the distant past as well as deeply embedded scandals of the present. This ensures that our era will be looked back upon as one that forgot its humanity and moral fibre.
The legitimization of brutality seems to be aligned with the rubber stamp of authenticity in 2025. The reaction to Syria’s very recent treatment of its minority communities was met with ignorance as well as the lifting of sanctions and funding, continuing with on the ground support from NATO allies itself. This all occurring during an active targeting of these communities, with responsive support being the first act of new leaders in the West. The rightful championing of a fight against tyranny in places like Ukraine were treated in the exact opposite manner in countries that were once the best of Western allies, still having their ex-patriot populations living in fear, even inside safe Western countries.
The War in Ukraine could not have been more different to the fall of democratic Hong Kong. Hong Kong became part of Greater China in 1997, but was to have its democratic values enshrined when China who took over the territory at the end of a treaty agreement. Over the last few years, Hong Kong has lost much of its democratic character and control, with protesters being subject to censorship and arrest. This core change in Hong Kong was not only ignored by its Western allies and Commonwealth nations, ones that shared a similar Government system to Hong Kong, but was done in almost complete silence and denial by its former Western allies. Hong Kong was a democratic cousin of the Commonwealth, abandoned by its own Parliamentary Democratic family. It could not have been a more different response to the fight to free Ukraine.
The current situation in Hong Kong is one that mirrors that of a Milan Kundera novel. An author known for his internal characterisations of those living under the Iron Curtain in former Czechoslovakia, Kundera spoke of the lives of those terrorized by the threat that their neighbours, and even family members, would report them to the KGB style secret police. The denial of speech required universal and persistent observation, producing a mental tyranny where the fear of almost certain death at the hands of their own Government was their reality. Kundera’s work gained many readers in other regions of the world as well, being well known in Latin America as military dictatorships oppressed individuals in a similar fashion. To the oppressed, the title of their oppressor makes no difference if the end results brings you to the same fate. As for Hong Kong, we hope that our closest democratic cousins are able to enshrine their freedoms wherever they currently reside.
The silence in some Western countries seem to run quite deep, and the shocking revelation during an election campaign shows this evidence quite clearly. Upon meeting a Czechoslovak scientist in the past, I was made aware by her that under Communism, no one truly believed their Government, but in our country in the West, people believe whatever they were told. This truth became very apparently when during the current election, a man who was appointed to be Prime Minister outside of any citizen vote, made it clear that reporting a fellow citizen to a foreign Government’s secret police by one of his active Ministers was not considered a crime or even a grave offense by himself or his party currently in power. The thought that a foreign agent can oppress a citizen of a Western country, and have its sitting Government support it inside of that same country, is something out of the worst nightmares of a Kundera novel. Even dissidents during the Cold War could expect sanctuary and safety in the West as Kundera had sought for himself to avoid arrest for the crime of “authoring”. While the past era would have resulted in such a government being sanctioned by all of its allies immediately upon hearing of the oppression of one of its citizens and opposing candidates, this act has been normalised in the middle of an election campaign right on the other side of the US border. Much like for Hong Kong, for minorities in the Middle East and thousands of other cases since 2014, oppression operating in silence in all parts of the world is becoming horrifyingly systemic.