How blockchains can help resist censorship, and how governments might regulate them via fiat-crypto currency exchanges and securities laws
Kyle Samani / Multicoin Capital :
Context & Ripple Effects
Writing in 2017, Multicoin Capital's Kyle Samani staked out a two-sided claim: blockchains are built to resist censorship, but governments need not attack the chains themselves — they can regulate the fiat-to-crypto exchanges where users convert money in and out, and apply securities law to tokens. Eight years of related coverage reads like a scorecard on that bet.
The chokepoint half of the thesis held up uncomfortably well: during protests in Hong Kong, Lebanon, and Iran, governments cut internet access and disrupted exchange access, throttling bitcoin's usefulness precisely when censorship resistance mattered most. Meanwhile the US Securities and Exchange Commission has moved from ad hoc enforcement toward chair Paul Atkins' stated aim of rules for blockchain-based securities — the exact lever Samani identified.
First-order effects
- Exchanges are confirmed as the practical regulatory pressure point: when states want to limit crypto, cutting connectivity and exchange liquidity works faster than attacking the protocols themselves.
- Token issuers and trading platforms face the securities-law pathway Samani described, with the SEC now signaling it will replace case-by-case enforcement with formal policymaking for blockchain assets.
Second-order effects
- Regulation-by-on-ramp pushes activity around the chokepoint rather than eliminating it: cash-to-crypto swaps now let users convert local currency to stablecoins outside traditional financial oversight, including past sanctions.
- Blanket bans are losing favor as a countermeasure — an IMF and Financial Stability Board paper warns jurisdictions against them, recommending targeted restrictions instead, which implicitly validates the exchange-and-securities approach over prohibition.
Third-order effects
- If the pattern holds, the long-term contest is not blockchains versus states but on-ramps versus off-ramps: censorship resistance survives at the protocol layer while states concentrate control at conversion points, and lobbying by institutional players like Fidelity for Bitcoin ETFs shows incumbents seeking legitimacy through those same regulated gates.
- The unresolved question Samani framed in 2017 — whether token issuance counts as securities — is migrating from courtroom improvisation toward codified rules, which would decide how much of open finance can legally exist inside regulated markets.
The trend: Crypto's censorship-resistance promise is being tested less at the protocol layer than at the fiat on-ramp, where regulators and users alike have converged their strategies.