[guipsp]

I mean, you'd sanction that address and any other it deploys to. In addition, sanctions are transitive (by how much no one knows).

[bee_rider]

Not knowing anything about cryptocurrencies or running distributed systems on the wilds of the internet, I will ask a dumb question:

Is it possible to design an algorithm that comes to a consensus on what new address to use faster than the legal system can sanction them?

[EddySchauHai]

You could cascade the sanctions so any addresses touched by sanctioned addresses becomes sanctioned too; that leads you open to trolling and abuse where a sanctioned address sends money to celebrities to impact them. This could probably be dealt with by saying anyone who uses an obvious Tornado-style contract that's been sent money from XYZ address is illegal, so you don't end up with the trolling, but I don't know for sure how that'd work.

[bee_rider]

There are still big legitimate institutional entities doing crypto, right? At some point you must hit "7 degrees to Wells Fargo" or whatever, right?

[chrisco255]

Of course. It's a riskier implementation from a smart contract security standpoint, but entirely possible.