Sanctioned crypto users are evading asset freezes by 'bribing' the computers that process blockchain transactions.
March 31, 2026
Original Paper
Ordering Power is Sanctioning Power: Sanction Evasion-MEV and the Limits of On-Chain Enforcement
arXiv · 2603.27739
The Takeaway
Research into USDC and USDT stablecoins revealed that even when an issuer tries to freeze a wallet, the 'freeze' command must compete in a race against the criminal's exit transaction. By paying high 'bribery' fees to block producers, up to 18% of sanctioned users managed to drain their accounts to zero before the law could catch up.
From the abstract
Centralized stablecoins such as USDT and USDC enforce financial sanctions through contract-layer blacklist functions, yet on public blockchains a freeze is merely an ordinary transaction that must compete for execution priority. We identify a fundamental gap between contract-layer authority and consensus-layer enforcement: when a sanctioned entity's transfer and the issuer's freeze race for inclusion in the same block, the outcome is determined not by regulatory mandate but by the economically m