> It will not be legal for miners to run/"execute code on behalf of" smart contracts from the sanctioned list, which can be downloaded from the Treasury web sit

> It will not be legal for miners to run/"execute code on behalf of" smart contracts from the sanctioned list, which can be downloaded from the Treasury web site and is updated regularly. This is very akin to how the sanctioned people list works currently. This has come up in other contexts before, most famously the idea of using OP_RETURN to embed child pornography into the Bitcoin blockchain. An Ethereum client must download and execute all transactions in each block in order to determine if that block is valid, and thus learn current state of the system. The client can't know if this "illegal" transaction has been executed until it actually executes it. As an operator you don't have any choice, other than simply turning everything off and "rugging" all your customers. So let's say you're Coinbase. You have billions of dollars of other people's money, innocent people's money, in your custody. If you refuse to process blocks that contain transactions involving sanctioned entities, or that contain illegal child pornography, you destroy those billions of dollars of assets. You're not going to make billions of dollars of assets unspendable. Not a snowball's chance in hell. You will process those blocks as the protocol requires. Doing otherwise would be as ridiculous as Google turning off its entire search engine merely because some of its automated actions technically violate laws from time to time. It would be like Intel razing a whole semiconductor fab to the ground because it learned that some of the sand used in creating some wafers was sold by a sanctioned country. There is absolutely no way the US government is going to demand that kind of destruction of value as a matter of compliance.