Digital Sovereignty and the Paradox of Post-Territorial Control

In August 2022, the United States Office of Foreign Assets Control designated Tornado Cash — an autonomous smart contract protocol with no directors, no registered office, and no territorial jurisdiction — as a Specially Designated National. The most territorial of instruments, the sanctions list, was deployed against one of the most post-territorial forms of digital organisation. The state won. This article argues that the episode was not an anomaly but a structural revelation. Digital sovereignty contains an internal contradiction: the same technologies that decentralise territorial authority simultaneously create new architectures of control that may become more granular, more automated, and more difficult to contest than the territorial sovereignty they appear to displace. Drawing on the regulation of decentralised autonomous organisations (DAOs), central bank digital currencies (CBDCs), extraterritorial sanctions enforcement, platform governance, and digital identity infrastructures, the article examines how sovereign authority is increasingly relocated from territory to infrastructure — from the border to the compliance layer, from the passport to the wallet address, and from physical coercion to programmable access control. The article situates these developments within broader debates on sovereignty, jurisdiction, and governance in international law. It argues that digital infrastructure increasingly functions as a new territory of sovereign power and that whoever controls the infrastructure increasingly controls the governance.