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Three days ago, the New York Times reported that offshore cryptocurrency exchange Binance is being sued by the families of 300 U.S. citizens hurt or killed during the October 7 attacks in Israel. The families allege that Binance turned a blind eye as Hamas and other terrorist groups used the exchange to launder over $1 billion, including $50 million after the attacks. This lawsuit is one example of what happens when the infrastructure of digital finance drifts out of the jurisdiction of free societies. When core liquidity rails sit offshore, in opaque environments with unclear ownership and little accountability, the United States loses visibility into the movement of capital and loses its ability to enforce the norms that underpin global order.
Crypto on-ramps are no longer trivial marketplaces. They function as ports in a growing digital economy, places where identity verification, liquidity provision, custody, and intelligence collection meet. In the last century, control of physical infrastructure shaped the balance of power. Nations that built ports, industrial bases, energy grids, and telecommunication networks shaped the rules of commerce and influence. In this century, the equivalent infrastructure is digital. Exchanges, custody platforms, stablecoin issuers, and wallet providers form the gateways through which value moves.
America benefits when these gateways are domestic. The United States can supervise compliance, enforce sanctions, require transparency, and ensure that large-scale financial activity serves national and civic interests. American exchanges that cooperate with the Treasury and the Department of Justice contribute to deterrence and stability, whereas an offshore exchange that operates behind layers of corporate opacity creates blind spots that adversaries can exploit. The Binance case is one such blind spot, but not the only one. The broader reality is that flows routed through offshore hubs are inherently less visible, less accountable, and less aligned with U.S. standards.
Some argue that the response to these failures should be to tighten restrictions on the entire crypto sector, but that approach misreads the strategic situation. If the U.S. pushes on-ramps offshore, it does not eliminate risk. It shifts risk to jurisdictions that may be captured by state-backed interests or governance models incompatible with transparency and rule of law. When foreign actors dominate key liquidity rails, the U.S. loses both intelligence and leverage. Capital flows routed outside American oversight are not easier to manage; they are harder to detect, harder to scrutinize, and easier for hostile actors to use.
The exchange layer determines who can participate in markets, how funds are monitored, what data governments can obtain, and how quickly suspicious conduct can be stopped. If these functions are governed by democratic institutions, they advance openness and accountability. If they are governed by foreign entities with opaque ownership or political entanglements, they advance the interests of those power centers instead.
There is also a civic dimension to this debate. Open financial systems depend on infrastructure that reflects open values and gives innovators a reason to build within the United States rather than abroad. If American entrepreneurs are forced to operate outside U.S. jurisdiction, the result is not a safer system but rather a fragmented landscape where responsible actors leave, and irresponsible ones thrive.
The appropriate response is not disengagement but investment anchored in a coherent doctrine of digital economic sovereignty. That doctrine should include a national security review mechanism housed within Treasury and Commerce, empowered to scrutinize foreign ownership, data custody, and political entanglements of any exchange seeking to operate in the United States.
It should also establish automatic disqualification rules for exchanges previously found to have violated U.S. sanctions, Anti-Money Laundering (AML) obligations, or the Bank Secrecy Act. The mandate of the Committee on Foreign Investment in the United States (CFIUS) should be expanded to explicitly cover digital asset exchanges, custodial infrastructure, and liquidity hubs. And finally, foreign platforms applying for U.S. access should be required to demonstrate reciprocal enforcement parity in their home jurisdictions, with AML and sanctions regimes no weaker than those of the United States.
The world is moving toward a digital financial order, and the country that builds and governs the on-ramps will shape that order. The United States can either lead by ensuring that the core infrastructure of this system remains aligned with democratic institutions, or it can allow key functions to migrate to foreign hubs where transparency is optional and accountability is negotiable. When vital infrastructure sits beyond American oversight, the U.S. finds out about problems only years after they occur. By keeping the on-ramps at home, the U.S. preserves visibility, upholds its values, and prevents adversaries from shaping the financial architecture of the next century.
