Dadon: SWIFT’s Russia cut exposed legal limits of neutrality

In 2022 SWIFT removed major Russian banks after European Union sanctions. Albert Dadon argues that action showed a network’s legal domicile can override its governance structure and limit access to international liquidity.

SWIFT is a member-owned cooperative based in Belgium, created in 1973 to carry interbank messages. It is governed by a global board and overseen by major central banks, but it remains a legal entity subject to Belgian law. Dadon notes the cooperative complied with EU rules when sanctions were imposed.

Other exclusions, such as earlier bans on Iranian banks, preceded the Russian disconnection. After 2022 banks and policymakers sought alternatives, including China’s CIPS system and cross-border stablecoin corridors. Dadon says those options would face similar pressure unless enforcement of rules is separated from a single legal jurisdiction.

Dadon separates two ideas that are often mixed in debates about neutrality. He argues, “The problem with how credible neutrality is used is that two things get conflated. Governance neutrality-who has a vote? And rule enforcement governance-who can change the rules?” He points out that a global board did not prevent SWIFT from following Belgian law once sanctions were in place.

He proposes a technical change to how rules are enforced. Instead of relying on human operators and court-compelled corporate entities, Dadon recommends moving enforcement into secure hardware and automated policy execution. His project, Aeredium, aims to combine protocol-level privacy with controlled, auditable disclosure mechanisms inside hardware enclaves.

The debate over privacy and regulatory access is central to the proposal. Regulators treat some cryptographic privacy tools as a risk for money laundering, and Web3 participants view confidentiality as necessary for commercial use. Dadon argued, “Choosing between total privacy and full-scale surveillance is a false binary,” and he referenced enforcement actions against privacy-focused tools as examples of how pure confidentiality attracted regulatory intervention.

At the same time, Dadon warned that full exposure would be unacceptable to institutional users. He observed, “No corporate counterparty is ever going to transact on a network where the operator can read all their business data in cleartext.”

Security at the connection points between traditional finance and blockchain networks is a separate concern. Attackers have increasingly targeted bridges, oracle networks, multisignature signers and admin keys. In April 2026 a cross-chain exploit of KelpDAO led to the theft of about $290 million in restaked Ethereum assets after a single-verifier network was compromised. Dadon commented, “When you rely on a separate, third-party trust layer, it always becomes the weakest link.”

Aeredium’s architecture is described as enforcing network rules within hardware enclaves and automated systems while providing selective disclosure for authorized parties. Dadon argued, “Credible neutrality, in my view, is not a governance question. The rules have to be enforced by something that a jurisdiction doesn’t have any authority to change.”

Banks operating across multiple countries remain subject to local regulators, which creates situations where infrastructure tied to one jurisdiction can be compelled to act. Dadon says that legal accountability for individual institutions differs from the way shared network infrastructure can be designed and enforced.