- Financial institutions are increasingly worried about their legal duty to stop state-backed Hackers like North Korean groups from accessing their crypto systems.
- The “guardrail” design of Digital Asset‘s Canton network allows participants to block malicious actors, a feature that contrasts with pure decentralization.
- Arbitrum‘s security council freezing funds from the $290 million Kelp DAO hack was defended as necessary, not a “bad thing.”
- The choice between absolute permissionless access and security features remains a central tension in DeFi and institutional adoption.
Wall Street’s interest in blockchain is being tempered by serious security fears, with financial firms now asking about threats from North Korean-linked Hacking groups even before the recent $290 million Kelp DAO exploit. According to Digital Asset CEO Yuval Rooz, these institutions have a fiduciary duty to ensure “that bad actors cannot engage with their systems.”
These groups have stolen over $6 billion in crypto since 2017, evolving from simple scams to complex, months-long infiltration campaigns. Consequently, the permissioned Canton network, which lets participants implement access “guardrails,” is being pitched as a potential solution to such infiltration risks.
However, this design has chafed crypto purists who argue it isn’t a “true” blockchain. Meanwhile, similar centralization debates flared when Arbitrum‘s 12-member council moved to freeze $71 million from the Kelp attackers on its Ethereum layer-2 network.
Rooz argued that freezing such funds wasn’t a bad thing, stating, “One of the things that, to me, is pretty interesting about DeFi is that people want all the freedom in the world with none of the risks.” He acknowledged projects on Canton can choose to mirror the open access of networks like Ethereum and Solana.
Ultimately, the tension between decentralization and safety persists. This dynamic is already visible with stablecoin issuers, as Circle said it won’t lock funds without a court order, while Tether has worked to freeze funds linked to illicit finance.
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