For a long time, Web3 has been promoting a narrative of absolute decentralization and opposition to sovereignty, and the market has been quite receptive.

But reality is harsh: when the narrative-level self-indulgence collides with the state machinery of sovereign nations, the consequences can range from minor setbacks to being crushed outright.
- Tornado Cash, which is revered by black and gray industry as a benchmark, was sanctioned by the U.S. Treasury Department in 2022, with two core founders facing five years or more in prison.
- Ripple, ranked among the top five by market cap for thousands of years, has been embroiled in a prolonged tug-of-war with the SEC from 2020 to 2024, ultimately being fined $125 million in civil penalties, with hundreds of millions spent on legal costs and wasted time, severely damaging the ecosystem’s vitality.
- TON once planned to launch the world’s largest ICO, but was abruptly halted by an emergency restraining order from the SEC just before its mainnet went live. The founders were forced to abandon the project, refund $1.2 billion to investors, and pay a $18.5 million fine. The grand narrative was completely derailed.
Similar cases are countless; technology can be decentralized, but teams cannot be decentralized, and projects fundamentally cannot oppose the machinery of the state.
Therefore, leaning on the state, negotiating with regulators, is not a retreat but a pragmatic attitude that should be followed.
In this regard, IOTA, as an elder project, has actually done very well.
IOTA early on abandoned the illusion of decentralization and anarchism, instead focusing on transforming into a foundational infrastructure that can be embedded into traditional finance and government governance.
- Middle Eastern compliance bridgehead: establishing a strictly regulated IOTA Foundation, securing $100 million support from the UAE Trade and Technology Fund, focusing on tokenized trade finance.
- International organization collaboration: co-building the TWIN global trade network with organizations like the World Economic Forum, enabling trade digitization pilots in the UK and East Africa to run on-chain, even deploying full-time officials from the UK government for up to 12 months.
- National-level cooperation among three African countries: the officially announced ADAPT program selected Kenya, Morocco, and Nigeria as the first implementation countries, jointly promoted by the African Free Trade Zone Secretariat, after rigorous screening based on political commitments and regulatory readiness.
It’s worth noting that the choice of these three countries in the ADAPT plan was not random but based on their complementary strengths in digital transformation:
- Nigeria, as Africa’s largest economy, has a huge market size and a very high level of crypto penetration.
- Morocco is the most digitally advanced and infrastructure-rich benchmark in Africa.
- Kenya, as the pioneer of mobile payments, has a natural acceptance of digital assets among its population.
With a precise combination of scale, technology, and penetration, along with clear political commitments from each government, IOTA has been able to operate a compliant cross-border trade clearing and settlement flywheel within a highly predictable sandbox environment.
These three strategies greatly reduce the likelihood of being hammered by sovereign institutions.
By pre-positioning in the payment and identity layers in the Middle East, Europe, and Africa, IOTA has long anticipated the global acceleration of regulatory enforcement.