Canton Network's Permissioned Design Seen as State-Sponsored Hack Deterrent

Digital Asset co-founder and CEO Yuval Rooz emphasizes that the design of Canton Network serves as a safeguard against state-sponsored hacks, which are increasingly concerning for financial institutions. These concerns were present on Wall Street even before Kelp DAO's $290 million exploit in April 2026.

Rooz notes that North Korean-linked groups have stolen over $6 billion in crypto since 2017, and their tactics have evolved from phishing attempts to multi-month infiltration campaigns designed to gain privileged access to DeFi protocols. Traditional financial institutions view blocking such actors as a core fiduciary obligation, not an optional precaution.

Canton Network is a public, permissioned blockchain that launched in 2024. Rooz argues that participants can implement guardrails on the subnets they create and the digital assets they issue, making it difficult for North Korean-linked groups to operate within the network. He claims this design reflects what large institutions require from any blockchain infrastructure they are willing to adopt.

The debate surrounding Canton's permissioned design has sparked criticism from crypto purists, who argue that it is not a true blockchain because participants can restrict user control over assets and activity. However, Rooz defends the council's decision to freeze $71 million in funds left exposed on the Ethereum (ETH) layer-2 network by Kelp DAO attackers.

The incident triggered a wider argument about whether such actions are compatible with permissionless principles of DeFi. Rooz countered that the freedom and risks associated with DeFi need to be balanced, and he pointed to the contrasting approaches of Tether and Circle as an example of how stablecoin issuers navigate this tension.