Honestly, I think the behaviour of the ethereum devs have led them to an inevitable head on fight with basically every large jurisdiction. You can't build a system that is explicitly designed to process transactions from sanctioned countries and expect that the no one is going to step in. It would be one thing if the devs could answer the simple question of "Who, other than Iran and North Korea need this?", but literally that is the only problem they're solving. The best case scenario is that Ethereum is going to end up as a fragmented cluster fuck where the biggest entities are compliant with US and EU law whilst a small cohort of entities are still helping the North Koreans launder money, or Ethereum caves and the core of their PoS algorithms are changed. And it's not unlikely that along the road to them caving there will be prison sentences.
The US government is not going to go "Ah, I see you've found a grey area, let us carefully consider this". It's going to go "Iran. Terrorism. Shut it down."
It's a global p2p network that anyone can join. It's not "explicitly designed to process transactions from sanctioned countries," any more than any other blockchain. It doesn't even have base-layer privacy like zcash or monero.
Their implementation of the Proof of Stake slashing is designed explicitly to prevent the type of censorship that is required to prevent transactions that breach sanctions.
Slashing only occurs in response to certain specific rule violations. Censorship isn't one of those, and there's no way censorship could be one of those because the protocol doesn't know what's outside of it.
To penalize censorship, you'd need to socially organize a hard fork that manually removes the stake of the censors. But you could do that with any proof-of-stake protocol.
So then the question is whether the purpose of proof-of-stake in general is to enable social forks against censoring validators. But I think it's pretty clear that the primary purposes of proof-of-stake are to eliminate proof-of-work's absurd carbon impact and to provide more cost-effective security. Ethereum's particular PoS design also enables the scaling methods coming next in the roadmap. Another benefit is more regular block production, which is nice for UI.
Meanwhile, PoW is not exactly prone to censorship either. If only 10% of the world's miners are willing to include a transaction, then it will just take 10X longer to get that transaction included. Any miner unwilling to build on blocks containing prohibited transactions is likely to pay an economic cost for that.
Finally, it's not clear that sanctions law impacts block producers anyway. OFAC hasn't attempted to enforce sanctions that way, and at least according to Coinbase's chief legal officer, the law clearly doesn't apply to miners or stakers: https://twitter.com/iampaulgrewal/status/1566225955248427008
This is going to encourage US-based Ethereum users to stop runnning nodes, and users outside of the US to start running nodes, just to weaken the SEC's outrageous argument. The narrow-minded attempt by the SEC expand its jurisdiction, and by extension, budget, is going to cause long-term harm to US innovation and competitiveness.
Another option is for the entire Ethereum network to cloak itself behind an onion-routing network, which given the evident desire by many people to prevent people from using cryptocurrency and force them to submit to centralized regimentation of private financial interaction - even at the expense of basic internet freedoms - may be a prudent step to take.
I assume you're not familiar with the developments in the space, like the growth of stablecoins ($20 billion to $140 billion in two years) and their proliferation across numerous domains and developing economies.
This is extremely consequential to US national interests, as at the moment, the USD is the primary collateral backing stablecoins, which means that stablecoins could usher hyper-dollarization as a result of their ability to extend the USD's reach to all corners of the world.
More generally, a free market generally works better than the government dictating, on the basis of centralized binding judgments on what is useful, that particular technologies cannot be worked on.
The former is consistent with US values and the latter is the province of top-down controlled societies like the PRC. The latter lacks the humility to acknowledge that you may not know everything and you may support the wrong centrally imposed plan on other people.
It’s funny that the base assumption is always that all bureaucracy is bad and needs to be demolished. If the same mentality has reigned in the automotive industry proper as it does in the new tech-automotive industry, the concept of crash tests would never had been invented, we’d just put the car on the market and do statistics on how many of the customers died. The concept of phased studies to show efficacy and lack of toxicity in drugs wouldn’t exist. We’d just sell whatever and stop producing the drugs that killed people and focus on the ones that seemed to work in market.
The idea that “the consumer chose the product so all responsibility is theirs” is extremely naive and not echoed anywhere else, so why is it that the crypto space seems to feel that they should be completely excerpt of all regulations even as we see constant scams, theft and real, life detailing financial damages pushed onto the consumers who enter into the space in good faith.
I also think banning free choice in shop by regulation is proper saving lives by gradually limiting toxic to human body carbohydrates in food to safest & healthiest level of zero...
just after banning me option to buy healthiest human food and my daily meal - meat replacing it with cancerous plant-oil replacement.
The safest roads - these where all people drive glass cars or tanks.
Regulations as everything should also be decentralised & deglobalised. You don't like law? Go to the region with a different laws restrictions or none. But nobody wants promoting invasion of one option on other making it an authoritarian default.
Seatbelts in 99% cases helps in 1% damages you including burning up alive.
With full freedom you learn responsibility & create organic institutions to educate others & learn choosing good over bad.
When you limit freedom you push people into state of mental disability to evaluate reality on their own & dependency on centralised arbiter.
Leaving slave mentality & jump starting own brain takes a while. Often requires generational replacement.
I'm all in for full information and detailed labelling, state institutions with objective studies & product stamping. But never for any choice limitation.
I want to choose the filters, with option of none, not being forced to use one.
I also want democracy with personal voting on each regulation & not being forced to vote for this or that package of things coerced into blindly accepting bulk of things attached to one thing i actually care about to change.
Internet supposed to add to our regularly limited choices. What's it's feature and it's curse.
If the US government goes to war with crypto, it’s not going to be a long fight. The exodus of corporate capital from the ecosystem will be a fatal blow to crypto prices and projects.
> “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.” The SEC then concludes: “As a result, those transactions took place in the United States.”
I wonder what other legal implications this precedent has (if it holds).
I probably won't think of any before hitting send on this comment, but this seems like the type of claim sufficiently disconnected from the reality of how a blockchain network functions (though Gensler has proven competence on the subject) to allow some unintended loopholes or interpretations in other cases.
The reverse of this is interesting. IF large number of validators moved out from USA servers. Would then the transactions be outside USA? And would someone track at all times where the majority or validators are? Or likely plurality?
This is also how companies like Optiver 'legally' make 'decisions' in 'other countries' (run some code to execute a transaction on a server somewhere else).
If you used mechanical turk, where is the task legally completed?
I guess it's just loopholes against loopholes? Gary is a smart guy. He gave some excellent lectures about all this.
When you open an bank account anywhere in Europe you need to specifically sign that your money is not from the US or go through many extra hoops and maybe get a no. I wonder if that is also affected from this.
This sounds like bad news but I see it as good news. The only way the SEC can go after fraudsters is to have jurisdiction over what they have done. The SEC can now go after the frauds against Ethereum users no matter where the fraud was committed.
Crypto will never be a legitimate investment class if people can't trust that they will get their investment back. It's also impossible for it grow to fill a need without trust. Crypto-Land should be jumping with joy at hearing this news.
How about the US not fucking around in other countries jurisdictions? I for one have no association with the US and don't plan on having one just because I may own ETH
As long as the SEC (and the rest of the US government) limits itself to going after solely fraud, that might be ok. But inherently falling under US law means being controlled by the US government and that is exactly the OPPOSITE of what crypto is meant to be about. If you have to do KYC, trade only with approved counter-parties, pay fees and taxes not due in your actual location, and be subject to US sanctions and US decisions what is the point of any of this?
If you take that angle then crypto will still never be a legitimate investment class either way, because all of it (including BTC and ETH and everything else) is a giant fraud predicated on the falsehood that it is "decentralized" and somehow that makes it unregulated. There is no other reason for it to exist. This is just another nail in the coffin, they can't lie about it anymore.
If crypto-land really wants to follow through on their lawless anarchist fantasies, then they should be even happier if the SEC bans all of it outright. Then they can all go back to their roots when the only thing bitcoin was used for was illegal black market drug transactions...
ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneously making everyone rich just for holding some tokens? I wish I was making this up, or maybe I was just getting trolled...
I did read it and it is honestly not that complicated. The SEC is being generous here. They could make the argument even if there were no validators. But I hope this is the start of them shutting down the validators too.
US gov has a way of keeping certain things illegal that would otherwise take away employment and purpose of their own agencies. Just look at the DEA/"war on drugs".
The English language is from England. So is it fair and right that you can only use it if you agree to be subject to english law? To pay english taxes to the english crown?
It's a real system that was made in the United States. You don't have to be a company to be subject to the law.
If you make something in a country, it's subject to that country's laws.
Think about it: you're basically suggesting that if you call something "a protocol," somehow it's no longer subject to the rule of law.
We go through "well yeah but it's not a" every couple of years. The explanations given don't really change anything.
Silk Road wasn't a company, and yet it was subject to US law.
I see that I'm being downvoted again, even though I'm speaking politely in good faith. :(
The truth is, though, as far as I can see, this is legally correct.
You can't just sit in a country and ignore its laws and then say "well no, it's an internet thing, the laws don't apply." That isn't how countries work.
The airplane was invented by the Wright Brothers, does that mean someone on a flight from Japan to South Korea is bound by US law? I can understand if the SEC said that all compute nodes residing in the United States, and any organization likewise located here is under their jurisdiction. I'm not a lawyer, so I can't argue whether the SEC is legally correct, but it seems absurd to me to claim jurisdiction over an intangible idea whose related productive work occurs all over the world.
> It's a real system that was made in the United States
Not sure that's true (most of the founder folk appear to be non-US based, and the foundation is Swiss if I'm not mistaken), nor is it what the US Govt is claiming.
The SEC appears to be saying "45% of the validator nodes on the network are US based, therefore the transactions happened here, and our laws apply". Which is a horribly bad statistical assumption by an agency that would, one hopes, employ actual mathematicians.
I'm far from an ETH fan, more old school BTC myself, but to me, this feels like an exact reminder of why centralization (Even at the country level) is bad, and I can only assume that someone somewhere, who is working on the "next generation of blockchain" just scribbled "GeoIP based node populations limitations/banning" onto their feature roadmap.
> Not sure that's true (most of the founder folk appear to be non-US based, and the foundation is Swiss if I'm not mistaken)
Sorry, I could have been more clear when writing. This was my fault.
I meant this physically. The network nodes are physical, and they're in the United States.
If you are from France, you go to Japan, buy a bunch of arcade machines, then bring them to the US, and make an arcade company, I'm likely to say you built your company here, even though you did your planning, financing, and purchasing somewhere else.
That's (as far as I can see, maybe I'm wrong) what the SEC is actually arguing - a substantial portion of the physical network has been built here, therefore our laws apply.
As far as I know, that's just a core concept in the law. Where the thing happens, physically, determines which laws the thing is subject to, worldwide.
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> The SEC appears to be saying "45% of the validator nodes on the network are US based, therefore the transactions happened here, and our laws apply". Which is a horribly bad statistical assumption by an agency that would, one hopes, employ actual mathematicians.
This is the norm in the legal system.
I'm actually not entirely certain what assumption is being made here, or how mathematicians would be involved. Maybe this is because there's something I don't understand about the Eth network. I'm worried I'm missing something, or discussing the wrong thing.
I thought from reading the document that this was just them saying "we know who these nodes are, they're American, and let's divide." Am I misunderstanding?
As far as I understand it, what they're saying is "if any ETH goes over American nodes, then American law has to be considered when trying to figure out if ETH is legal in America." I believe that's entirely correct.
I believe the observation they're actually making is "a bunch of Americans using American nodes are on this network - nearly half of it - so since that's at least one, it applies."
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> this feels like an exact reminder of why centralization (Even at the country level) is bad
As a gentle reminder, this was what Ross Ulbricht said, was that the rule of law was bad because he didn't like it, and therefore we should decentralize to evade the law.
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There's a tendency, in my opinion, for these discussions to focus a lot on why each person thinks everyone else's opinion is wrong.
I'll ask you directly. What do you think is right, here? I personally think that's a lot harder to answer.
Should Ethereum, or if you prefer individual transactions, be bound to any country's laws? If so, which ones? If not, why not? If this isn't the right question to ask, can you suggest a better one to me?
I think that after people have answered what they think is right, they'll find it's pretty similar to what people are saying is wrong.
I am not able to see much wiggle room here. As I see it, if any decision is to be made, then the answer basically has to be one (or more) of the following:
1. The country where the hardware is running gets to set the laws
2. The countries where the transaction is happening get to set the laws
3. Both 1 and 2 (this is what I believe current international law supports)
4. No laws apply
5. The scale is something different than "country," but otherwise still 1-3
It's not clear to me what other options even exist. (Maybe I'm missing stuff?)
I think that as soon as people try to look for anything other than those five, and realize that something has to be chosen, they might start coming to some different viewpoints.
Do you prefer one of those five? If not, do you have an alternative, or maybe a replacement question?
I don't think almost anyone actually wants a lawless anarchy like in #4. But also, I think this discussion is rejecting countries as arbiters of laws here on the presumption that that's somehow obviously wrong, and it's not obvious at all, to me. Who else would do this but governments?
Just my beliefs, though. I'm happy to be wrong, and if you can think of a sixth option, I would like to know what it is, even if you don't think it's the right choice.
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I also have a really hard time with the amount of pollution this is all dumping, even after POS, to be honest. I think that gets downplayed too much. It's why I've never been willing to participate.
Just the ETH POW -> POS change dropped a third of a percent of the entire planet's power, they said, and that doesn't quite half-fix the consumption.
A third of a percent of the entire planet, for less-than-half-fixed, for the second largest network.
Two large countries' worth of pollution to, in effect, run a stock trading simulation.
Here, we debate whether the transactions should be subject to the laws of the countries.
I honestly am not certain that I think any of this stuff will be legal in ten years, with the massive environmental damage it's doing in climate change's 11th hour.
Pakistan's under water, the Great Salt Lake is about to be a dust bowl, the Atlantic Deep Water Formation is failing, we lost Antarctica's three largest ice shelves this year ten years early (conger, thwaites, glenzer,) the Colorado River is drying up, most hydro dams can't produce much power anymore, &c. Food's getting expensive, that's the world's #1 predictor of war, historically, and it looks like it's only going to get worse. I could write this paragraph for pages.
We're starting the real environmental problems, and it will speed up every year. The pitchforks are coming soon, people will want to place blame, and they aren't going to stop with the Koch brothers.
I know I sound extreme when I say this, but I believe we will live to see a time where waste of pollution for personal wealth gain will be seen as criminal, because that's going to be the only practical way to stop the carbon economy, and look what the alternative is. I say this because even the Federal Government is saying "we have less than ten years left" and nothing is changing.
There's nothing ethically wrong with blockchain on a clean grid, but the grid isn't clean, and this bragging about 50% stuff is a clear sign that we can't have honest discussions when money is in play. People like to measure how much of it is solar, but PV solar is 76% natural gas backed on average, US DOE numbers, and CSP 71%, something absolutely nobody wants to face. Wind's hardly different
"It's difficult to get a man to understand something when his salary depends on not understanding it." - Upton Sinclair
Your wall of text is incoherent and reveals a deep lack of understanding of the blockchain. ETH doesn't "go over to American nodes" and validators running in the EU are not like American-made arcade machines.
> with the massive environmental damage it's doing in climate change's 11th hour.
> > If you make something in a country, it's subject to that country's laws.
>
> I don't know how this would be true. If anything operating from a country makes you subject to their law.
We're saying the same thing.
If you create something, and the thing you created is in country X, you made the thing in country X. It doesn't matter if you're in country Y at the time.
If I'm sitting in the United States, and I make something entirely on Japanese AWS servers, I built it in Japan. I wasn't in Japan, but the place it was built is Japan.
"I built it in X" doesn't mean "I was in X and I built it." "I built it in X" means "I built it, and the place it is is X."
We have trouble because it's only recently that these two concepts are meaningfully separable.
I'll phrase myself differently.
If a thing has been made, and its location is in Country X, then it is subject to the laws of Country X.
I accept that I wrote this poorly and that it's subject to misunderstanding that is my fault.
so i don't mean to seem rude, but, i'm not really sure what other options there are
if ethereum isn't bound by us law, is it that they should be bound by someone else's law, or not at all?
like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right?
so i'm not being sarcastic. i'm really genuinely asking.
what jurisdiction of law, if any, do you believe governs ethereum?
Cryptocurrency folk would have you believe in algorithmic governance / "code is law", and that as a globally decentralised system it should not be subject to any particular national jurisdiction.
This is, of course, completely divorced from reality.
That's missing the point, I think. Cryptocurrency applications and services are of course subject to the laws of local jurisdictions in which they operate. But for a decentralized protocol, what law enforcement can do is limited.
Maybe better to consider the same problem in a different domain: encryption. A court can order you to give up your encryption key or password. They can even do this if you don't know or have lost your password/key. But neither the court nor its enforcement agencies can simply issue a judgement to decrypt an encrypted email; your compliance is required. The court can hold you in contempt for the rest of your life for not revealing a key you may or may not have, but they can't force you to decrypt it if the key is lost or you don't give in.
Likewise for cryptocurrency and "code is law" smart contracts. A court (or regulator) could demand all they want that a bitcoin transaction be reversed, or that a DAO smart contract be frozen. But if the underlying protocol works as it is supposed to, and if mining/staking is properly decentralized, there ain't shit they can do to actually enforce that demand.
People transacting on a blockchain are still subject to local laws, and need to comply with relevant regulatory directives. No one of consequence seriously believes that something is above the law just because it happens on a blockchain. But pragmatically, a regulator can control the blockchain about as effectively as NASA could get into space by legislating gravity.
How many people have committed such egregious crimes using blockchains that it is literally worse to spend your entire life in jail than it is to give up your Bitcoins? That scenario you've presented makes absolutely no sense to me.
But anyway, it's still entirely wrong because they can still just catch you using traditional means. Like catching you on tape admitting you stole the Bitcoins, or getting a video of you doing it, or getting credible witnesses to say that you did it. Or similarly, to retrieve the stolen coins just get a video of your keyboard while you type the pass phrase to the wallet, or just liquidate the rest of your assets into dollars and pay back the victim that way... Like the whole thing just makes no sense. Even if it did actually work it would still be terrible because the system you describe means that if you get your bitcoins stolen and you catch the thief and he admits he did it and then intentionally goes to jail to avoid having to give the tokens back so they just sit there unused in the wallet just to spite you... you can literally never get them back. Why would anyone actually want that??? I am honestly trying not to make this so outlandish but this is entirely what you just described. It's completely ridiculous.
The only thing this accomplishes is if you are trying to destroy money and make someone suffer by taking destructive actions... but like, if you are really an evil and petty criminal person you can also just do that with anything else? Like, rob them at gunpoint and set their cash on fire? Or slash their car tires? No one needs Bitcoins just to be an asshole, you can see that every day on this planet...
I don't think this works because even if a transaction is irreversible, the court could still impose monetary damages, if it has jurisdiction. Or some other penalty.
And it seems hard to keep US machines (or any other country) out of a permissionless distributed algorithm? Effectively, any country could claim jurisdiction pretty easily, if it wanted, by adding a machine to the network.
> but they can't force you to decrypt it if the key is lost or you don't give in.
A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply.
> there ain't shit they can do to actually enforce that demand.
Watch forks become more commonplace and "official" forks being recognised and non-official forks being barred from use in any legitimate transactions. The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created. Perhaps to cherry pick transactions just like you can cherry pick git commits.
I wouldn’t be so sure about that, unless you are equally convicted in that court’s jurisdiction’s conviction to outright ban the whole chain from use - because as soon as two courts mandate two different forks, one of them will be banning a chain that the rest of the globe has consensus on. It’s a lot like banning a whole region from sending mail because one person in that region got caught mailing drugs.
Right - but nothing is stopping them from making that law. Countries aren't simply going to adhere to a digital currencies protocol or allow it to avoid regulation because otherwise it goes against the "community spirit".
Here we are talking about the hypothetical situation of the U.S claiming complete jurisdiction of Ethereum. The U.S could make whatever laws it likes around the usage of Ethereum, legislate that all nodes have to adhere to these laws and job is done. The rest of the world can say "lolbye" and continue using it like nothing has happened, but in the U.S they would likely have to fork and create a new chain, and those who want to use it legally in the U.S would also have to use this new U.S-regulated chain. From there they can then implement processes to reverse transactions, introduce identification requirements etc.
Yeah, if larger jurisdictions behaved as such the issues I described are easier to avoid. I don’t think the regulatory bodies have an attitude towards crypto that would enable that large scale attempt at control, but we can see how it’s possible.
When your protocol’s primary use case relies on denominating centralized currency, it makes these types of network attacks far, far more effective when the attacker controls that currency. People have completely forgotten about any use case of a non-excludable censorship resistant network that isn’t tokens, but I digress.
> A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply.
I must not be explaining well, because you're saying the same thing I am. There can be consequences for refusing to comply, ranging from being turned away at the border to being thrown in jail, all the way to, in some countries, torture and execution. That's how the government gets you to comply.
But--here's the critical point--your compliance is required to actually decrypt the email/drive/whatever. This is unlike, say, a cloud hosting provider where the government can just show up with a warrant or probable cause and get the data without your involvement. With strong encryption your data is protected by math, and the math insures that the government or whoever has to go through you to get it. No exceptions. They might throw you in prison for the rest of your life, or threaten to kill your family to get you to give up the encryption keys. But they do need to get you to comply to get access to the decrypted data.
Likewise with blockchain technology. A court or law enforcement agency can't just appropriate stolen bitcoin. They have to either (1) recover the keys, or (2) have the thief pay an equivalent amount in reparations. What I'm saying is that they can't just show up at the Bank of Bitcoin with a warrant and request a stop payment, recovering the funds that way as they're used to with the legacy financial system. The blockchain is irreversible even in the face of the law, for reasons rooted either in physics (proof-of-work) or math (staking).
> The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created.
No, at a technical level it is impossible. You could no more do this than legislate that pi=3 or raise the speed of light.
Completely see where you are coming from now - absolutely agree.
On your second point - where I am coming from is that there is nothing stopping countries from creating laws which introduce these powers and outlaw methods to avoid the new legislation. No it doesn't work with the current architecture. But we absolutely can end up in a situation where there is a U.S Ethereum chain where all nodes are legally required to follow updates/forks to the chain as they occur, caused by various court orders to reverse transactions etc. At this point the consensus can go whichever the government likes because those operating the nodes would want to be participating in the current legal chain.
> At this point the consensus can go whichever the government likes because those operating the nodes would want to be participating in the current legal chain.
I think this is an unwarranted assumption on your part. Capital would flee the US-controlled fork, causing the price of US-ETH tokens to plummet and staking to centralize. At that point there'd be absolutely no reason for US-ETH to exist: you could operate the same system more efficiently without a blockchain, and by isolating the system you would have lost the main, if not only advantage that blockchain systems have today: low-friction international transactions. Corporate entities which stick with the US-ETH split would find their revenues dry up very fast. I guarantee you that those which survive would be looking for ways to go multinational in their corporate structure so they can continue supporting ETH for non-US participants, and focus all of their efforts there. All this would do is isolate and exclude the US from participating in blockchain innovation.
> like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right?
But how is Ethereum an American company? How does that even compare? When I use visa I signed up for their bullshit. When using Ethereum I never agreed to the US intercepting my data just because a relevant node is randomly in their jurisdiction.
If a node Europe solves my transaction block I it's not an US transaction, isn't it?
I’m pretty on board with John Perry Barlow’s declaration of the independence of cyberspace[0], so I guess my preference would have to be none at all.
It seems obvious to me that things can happen online without jurisdiction, just like things can happen in international waters or outer space, and that though these can be governed by treaties or agreements, they cannot usefully be said to occur fully under any one or other jurisdiction.
The reality will be more nuanced than the idealised vision of [0], of course, but it will still be profoundly different to the reality that most regulators and governments would like to see, too. (Just like the reality around narcotics bears little resemblance to the world envisaged by the architects of the war on drugs.)
How this turns out remains to be seen, but it’s clear to me that the right thing to do is not necessarily for everyone to lie down and take whatever the legislators come up with. Civil disobedience is a powerful force for democratic change.
Ethereum itself probably isn't bound. But transactions there in would be. Now where the jurisdiction would be is messy thing. But all parties in single country is pretty clear even if things happened on the chain. With some bigger entity and customer, for EU likely if the entity has any presence in the customers country. With multiple parties it is bit messy. But still should be able to find it out.
The US government is not going to go "Ah, I see you've found a grey area, let us carefully consider this". It's going to go "Iran. Terrorism. Shut it down."