The creator of the layer-1 blockchain Jurat has stood up in defense of his protocol, countering potential critics by asserting that on-chain legal enforcement represents a crucial compromise for achieving widespread cryptocurrency adoption.
On August 8, a U.S. District Court employed Jurat’s on-chain enforcement mechanism to restrict access to crypto accounts held by a number of sanctioned individuals. These individuals had faced sanctions due to their involvement in money laundering and the use of ransomware to illicitly secure cryptocurrency payments, which ultimately supported North Korea’s weapons initiatives.
🔥🔥🔥
A court just entered final judgment in a federal lawsuit and the court used @JuratNetwork to enforce its order on-chain!The judge enjoined Russian and North Korean hackers from accessing their accounts, making $JTC the first cryptocurrency to comply with @USTreasury…
— Mike Kanovitz (@MikeKanovitz) August 8, 2023
In an interview with Cointelegraph, Jurat’s Founder and CEO, Mike Kanovitz, highlighted that the recent judicial order was unprecedented.
The Jurat blockchain, which emerged from a fork of the Bitcoin blockchain in late 2022, integrates blockchain nodes with court records to enforce legal decrees.
Kanovitz acknowledges that this technology is likely to face critique from ardent advocates of decentralization.
Nevertheless, the attorney hailing from Illinois asserted that such technology holds the potential to introduce essential due process safeguards for digital assets – a crucial factor for achieving widespread acceptance.
He elaborated, “Some of those currently advocating against on-chain law enforcement might alter their perspective if they were to experience hacking, fraud, or the loss of their private keys. In such scenarios, they would find comfort in the ability to reclaim their belongings.”
During the initial six months of 2023, blockchain security firm Beosin’s report from June 30 indicated that scams, hacks, and rug pulls had collectively led to a loss of $656 million in cryptocurrencies.
H1 2023 Web3 Security Statistics
🚨Total losses from hacks, phishing scams, and rug pulls in Web3 reached $655.61 million in the first half of 2023.
Among them,
108 attacks -> $471.43M
Phishing scams -> $108M
110 rug pulls -> $75.87M pic.twitter.com/8Q9kmDETfQ— Beosin Alert (@BeosinAlert) June 30, 2023
“It holds the potential to not just curb the disorder that deters potential adopters and draws the attention of governmental authorities, but also to unlock remarkable value for commercial activities,” he further stated.
Up to this point, courts have faced limitations in their ability to effectively freeze and confiscate cryptocurrency funds. A commonly employed strategy has been to instruct centralized crypto exchanges to either freeze the funds or disclose identifying information of the suspect.
However, the on-chain enforcement tool functions by establishing a connection between JTC’s blockchain and software nodes and the court chosen by the user.
In the course of a legal proceeding, each involved party submits a competing hash to the court outlining their desired action. Upon rendering a verdict, the court simply inserts the hash associated with the winning party. Subsequently, the software nodes independently execute the directive once they access the online court docket.
Kanovitz mentioned that at present, the tool exclusively operates within the confines of the United States and solely for the JCT blockchain. Nonetheless, he expresses his aspirations to expand JCT’s technology to encompass other Ethereum Virtual Machine-compatible blockchains in the coming times.
