Tokenised assets under sanctions: enforcement gaps, lex digitalis rei sitae, and programmable compliance

Abstract

This article examines the structural tension between territorially organised sanctions regimes and decentralised crypto and tokenised assets. It argues that the principal challenge lies not in the formal applicability of sanctions, but in an enforcement gap: traditional coercive models are designed around identifiable persons and legally ownable property, while distributed ledger systems operate beyond territorial seizure and technical shutdown. The study advances lex digitalis rei sitae as a functional connecting factor linking proprietary and sanctions-related effects to the jurisdiction exercising effective regulatory control over access and liquidity. It further demonstrates that sanctions enforcement increasingly relies on address-based designations, compliance obligations imposed on regulated infrastructure, and programmable compliance embedded in smart contracts and oracle systems. The article concludes that effective digital sanctions require modernised conflict-of-laws rules, explicit recognition of digital identifiers as sanctionable control points, and compliance mechanisms consistent with rule-of-law safeguards.