My Ofac compliant chain in my Ofac compliant country using my Ofac compliant “DeFi”

U.S. validators (which includes very powerful Coinbase) are gonna push for protocol-level censorship They can't self-help by merely avoiding facilitation of blocks containing U.S.-sanctioned txs, because under certain conditions they might be dramatically slashed from doing so.

I was using the term "slashed" here outside of acceptable Ethereum jargon they would be potentially"inactivity-leaked," which is also a form of financial penalty

And if the authorities determine the whole network Bitcoin or Ethereum is a tool to launder then they could presumably sanction clients, validators, mining companies. Mostly just to bring why this is everyone's problem and not just let them pick off team by team

signing a block with a sanctioned tx likely also violates sanctions fail to sign enough blocks, get slashed

If coinbase cant comply with regulations without getting slashed, then either those regulations change or coinbase shutdowns its staking services.

but we'd be foolish to expect they won't advocate for their own interests and controlling on-chain RWA like USDC gives them quite a bit of leverage. . .