The Treasury’s new sanctions campaign against Iran does not say it will go after decentralized infrastructure. It also does not say it will not, and Peter Van Valkenburgh, executive director of Coin Center, said that gap is worth watching.

The Treasury launched Operation Economic Outcast on Aug. 24, issuing sectoral determinations against five parts of Iran’s economy, digital assets among them, alongside technology, gold, aviation and shipping. The action expands who can be hit with secondary sanctions for doing business with the regime. Secretary Scott Bessent said in the release that the objective is “to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.” The Treasury said in the same announcement that it will be “uncompromising in targeting any source of the regime’s illicit revenue.”

Speaking on Unchained’s Uneasy Money podcast, in an episode recorded Aug. 26 and released Aug. 27, Van Valkenburgh pushed back on the most alarmed reading of the release, which host Kain Warwick said he had seen circulating on X. The action designates dozens of companies, exchanges and individuals, including several accused of stealing and laundering crypto, but no decentralized protocol. “I wanna be clear that the release is fairly neutral,” Van Valkenburgh said on the show. “It does say that digital assets and digital asset intermediaries are part of the suite of entities that they’re looking at potentially imposing secondary sanctions on.”

The question, he said, is what the government does with language that broad. The targets he thinks the administration should focus on are custodial: Iranian exchanges, front companies, money networks and brokers, or “the people who actually know exactly who they’re dealing with, are happy to deal with them, have agency and fiduciary sort of control over the money as it moves.”

The alternative is the one that worries developers. He asked whether the government would instead try “to shut these networks down” by going after “non-custodial infrastructure, you know, nodes, relayers, miners, or even at the more extreme end, software developers who make these networks possible.” His answer: “So they haven’t ruled that out.”

He was careful about how much to read into that. No agency announces the restrained version of its own campaign, he said, so the silence cuts both ways: it may preserve the option, or it may simply reflect that the government thinks going after nodes and developers is “a crazy thing” nobody needs to disclaim.

The statutory limit he says gets left out

Later in the episode, turning to the retrial of Tornado Cash developer Roman Storm, Van Valkenburgh pointed to a limit in sanctions law that he said rarely surfaces, and which bears directly on whether developers can be reached.

“Our sanctions laws actually have a pretty clear carve-out,” he said, describing it as a bar on using sanctions powers against information. That is the Berman amendment, which Congress added to the International Emergency Economic Powers Act and the Trading with the Enemy Act in 1988 to exempt information or informational materials from those powers, and broadened in 1994 to apply regardless of format or medium of transmission. It came from a member of Congress “who thought that the sanctions laws were good and important, but that we shouldn’t use them as a blunt instrument to restrict free speech,” he said.

It is not a new argument for his organization. He called it “the other thing that we talk about a lot at Coin Center” and a point he does not hear many others raise.

He anticipated the objection. “I’m not saying that in the sort of naive way” that a blockchain transaction is merely information and therefore beyond regulation, he said, and he allowed that Storm’s case is not a direct analogy. His narrower claim is that writing and publishing software is the protected conduct, whatever the software is later used to move.

Why he expects the pragmatic path

Van Valkenburgh told the hosts he believes “we overuse sanctions generally,” while adding that sanctions are “probably a great alternative to just going all, all out in war.” Going after protocols, he argued, would be poor enforcement on its own terms: it would “cause tons of collateral damage” while leaving the human brokers who move the money untouched.

He also said the compliance layer the Treasury would want already exists at the edges. Stablecoin issuers and front ends do this work now: “Uniswap on its front end that it controls has been doing sanctions compliance for a long time,” he said, as do Circle and Tether, though he noted he has no non-public knowledge of any issuer’s compliance program. On public blockchains, he added, sanctioned flows can be watched in real time, which limits how much non-public information sharing enforcement actually requires.

What he thinks actually serves American power

His broader position is that the durable approach is also the one that favors the United States. It should “embrace that these new technologies exist, accept that they can’t be regulated out of existence, and instead find as many paths to legitimize the businesses building on top of these networks as possible” so that oversight lands where humans are actually in the loop, he said.

Unchained reported on the sectoral determination when it was issued. Neither the release nor the determination behind it defines what it means to operate in the digital assets sector.

Related Listen: Treasury Puts DeFi On Notice as Roman Storm Trial Drags On