Financial Freedom Report #140

Welcome back to the Financial Freedom Report.

This week reminds us how fragile financial access can be in difficult political environments. In Iran, Tehran prosecutor Ali Salehi announced that the regime had identified and frozen 2,191 bank accounts belonging to 394 people accused of collaborating with a “hostile enemy.” This is the latest expansion of an asset seizure campaign that has already targeted journalists, opposition media workers, and other public figures critical of the Iranian dictatorship.

To a similar tune, in Malaysia, officials froze the personal bank accounts of human rights defenders Amir Hadi and Dobby Chew, as well as the accounts of MANDIRI and HAYAT, two civil society organizations they help lead. Critics say Malaysian officials are abusing the anti-money-laundering law to suppress dissent.

In tech news, researchers at Alloc Init, a cryptography group developing protocols for Bitcoin, proposed a new privacy system called Shielded Bitcoin. The system is designed to hide transaction amounts and links between senders and recipients, while remaining anchored to Bitcoin and requiring no major network changes. If successfully developed, it could enable much more private bitcoin transfers for activists, nonprofits, and dissidents.

In recommended content, we feature a Wall Street Journal article by Afghan tech entrepreneur and Digital Citizen Fund founder Roya Mahboob, who recounts how bitcoin gave women she employed in Afghanistan something banks and payment apps could not: a way to receive money directly, save privately, and control their wealth in an environment where women have little financial independence.

Now, let’s explore this week’s full news.

SUBSCRIBE HERE

GLOBAL NEWS

Iran | Regime Freezes 2,191 Bank Accounts in Expanding Crackdown

Iranian officials are expanding a campaign of financial repression against dissent and against individuals accused of opposing the regime. On Sept. 22, Tehran prosecutor Ali Salehi, whose office has been handling cases tied to recent protests and conflicts, announced that officials had identified and seized 2,191 bank accounts belonging to 394 people accused of collaborating with a “hostile enemy.” Salehi did not identify the 394 people or specify the charges against them, but earlier seizures in the same campaign have targeted journalists at Persian-language opposition outlets, media activists, artists, athletes, and other public figures, including Iranians living abroad. The announcement follows an earlier round of asset freezes in which Iran’s judiciary reported seizing assets of 240 individuals and freezing 182 bank accounts belonging to people accused of espionage, propaganda, or supporting “hostile governments.”

Why this matters: Iran is turning access to property and the banking system into a means of control. The scale of the latest seizures shows how financial repression can operate alongside arrests, censorship, and other forms of political repression. Officials do not need to silence someone’s speech directly if they can instead make it financially impossible for them to continue their work.

Malaysia | Arrests and Frozen Accounts Target Human Rights Defenders

On Sept. 22, Malaysian police arrested human rights defenders Amir Hadi and Dobby Chew under the country’s anti-money-laundering law after freezing their personal bank accounts. Hadi is a co-founder and executive director of MANDIRI, a youth-led civil society group focused on human rights, democratic participation, and grassroots organizing. Chew is also a co-founder of MANDIRI and serves as CEO of HAYAT, which campaigns against the death penalty and for broader criminal justice reform. The organizational accounts of MANDIRI and HAYAT were also frozen, and police raided their shared office, seizing financial records. The pair were held for three days and released on Sept. 25.

In context: The investigation follows regime allegations that MANDIRI received foreign funding for political activity, claims the organization denies. Rights groups argue that the financial restrictions and arrests are connected to Hadi and Chew’s peaceful human rights work, and have called on Malaysia to stop using anti-money-laundering legislation to restrict civil society. The financial impact is immediate: Frozen organizational accounts can prevent groups from paying staff and funding programs before anyone has been convicted of a crime. HRF’s Tyranny Tracker classifies Malaysia as ruled by a hybrid authoritarian regime.

Russia | Bitcoin for Me, Not for Thee

Russia is moving to put its newly legalized digital asset industry into operation. The Central Bank says officials are finalizing 27 regulations covering licensing, registries, digital asset depositories, and other requirements, with the first approved companies potentially entering the market before the end of the year. The framework allows exchanges, brokers, trust managers, and newly regulated crypto exchangers to facilitate transactions, while exporters and importers can use digital assets for cross-border settlements without limits. Ordinary investors may buy digital assets through these intermediaries, with purchases capped at 300,000 rubles per year per intermediary, while qualified investors face no limit.

In context: “Legal” access to bitcoin in Russia is increasingly being routed through state-approved intermediaries. That matters in a country where financial records have already been used to prosecute dissent: A Roskomnadzor employee received a four-year suspended sentence after investigators traced two donations totaling just $21 to Alexei Navalny’s Anti-Corruption Foundation, and Binance previously provided Russian officials with identity and transaction data later used in a criminal case against a user who donated cryptocurrency to Ukrainian causes. The central question for financial freedom in Russia is whether citizens buying bitcoin through regulated intermediaries will face the same surveillance and political risks as in the rest of the financial system. 

North Korea | $387 Million Drained from Bitget

Digital asset exchange Bitget says assets worth $387.5 million were transferred to attacker-controlled addresses during a Sept. 24 security breach. The attack affected the online wallet infrastructure Bitget uses to process transactions across several digital assets. Bitget temporarily suspended withdrawals, saying the vulnerability has been identified and fixed, and has pledged to cover user losses. According to CEO Gracy Chen, preliminary findings suggest a hacking group linked to North Korea may have been responsible; Chen cited IP addresses and virtual private network infrastructure resembling those used in previous North Korean attacks. That attribution has not yet been confirmed.

Why this matters: Centralized exchanges concentrate large pools of user funds behind infrastructure that becomes an attractive target for attackers. If the preliminary attribution is confirmed, the breach would fit a documented pattern of North Korean cyber actors targeting digital asset platforms; in 2025, for instance, the FBI attributed the $1.5 billion Bybit hack to North Korea. 

India | HDFC Bank Builds Digital Rupee That Only Spends Where It’s Told

HDFC Bank, one of India’s largest private banks, is developing new uses for the country’s digital rupee, including credit card rewards, gift vouchers, corporate allowances, and offline payments on flights. Companies would be able to distribute meal, fuel, and travel allowances, denominated in the central bank digital currency (CBDC), that can only be spent for their intended purpose. The bank is also integrating its CBDC wallet with BHIM, a popular payments app built on the Unified Payments Interface — India’s instant bank payment network that many merchants use across the country. Integrating the digital rupee with BHIM would significantly expand where digital rupees can be spent.

In context: India has demonstrated how quickly state control over money and digital infrastructure can affect ordinary people. In 2016, the government invalidated 86% of the country’s cash by value overnight. In 2024, Modi’s hybrid authoritarian regime froze the bank account of the leading political opposition. And 2025 saw 65 state-imposed internet shutdowns. The digital rupee gives those who already set the rules even greater control over how end users can spend money.

Sudan | Coffee Seller's Wages Tell the Story of a Currency Collapse

In Port Sudan, 27-year-old Aisha sells tea and coffee to support her parents and four brothers. Before the civil war began in April 2023, she earned about 30,000 Sudanese pounds a day, worth roughly $50 at the time. Today, she earns between 70,000 and 100,000 pounds a day, but because the currency has collapsed, that is worth less than $15. A single kilogram of beef now costs 68,000 pounds, nearly an entire day’s earnings, and the daily cost of traveling to work has quadrupled. In other words, Aisha can earn more than twice what she earned before the war and still fall behind. Across Sudan, families like Aisha’s are cutting meals, delaying medical care, pulling children from school, and borrowing just to get through each month.

In context: Before the war, the exchange rate was roughly 600 pounds to the dollar. As of Sept. 22, it is about 7,500 on the parallel market. The war has also dismantled the banking system, and annual inflation remains above 41%.

RECOMMENDED CONTENT

What Bitcoin Gave Afghan Women That Banks Could Not by Roya Mahboob

In a new essay in the Wall Street Journal, Afghan tech entrepreneur and Digital Citizen Fund founder Roya Mahboob recounts how she began paying women she employed in bitcoin after conventional financial tools failed to reach them. Few women had bank accounts, popular digital payment apps did not operate in Afghanistan, and paying salaries in cash posed its own risks. Cash wages could be taken by male relatives, leaving women with little control over the money they had earned. Bitcoin wallets gave them a way to receive earnings directly, save privately, and decide for themselves how to use the money. Read how here.

BITCOIN AND FREEDOM TECH NEWS

Alloc Init | New Research on Shielded Bitcoin

Researchers at Alloc Init, a cryptography group developing protocols for Bitcoin, have proposed a new way to make transactions significantly more private without changing the core Bitcoin protocol. Called Shielded Bitcoin, the system is designed to hide who is paying whom and how much bitcoin is being transferred, all while using the Bitcoin blockchain to record and order the encrypted transactions. To do so, users would move encrypted “notes” and use zero-knowledge proofs to verify a payment, rather than exposing transaction inputs and outputs, as is typically the case. This would require users to peg in and peg out of the shielded system, a feature yet to be developed. The result would be bitcoin transactions that expose significantly less detail about senders and receivers to outside observers. Read the full proposal here.

Why this matters: Bitcoin’s public transaction history can expose activists, donors, and dissidents to financial surveillance. Shielded Bitcoin could offer much stronger privacy, directly anchored to Bitcoin, without requiring users to trust a custodian or switch to another blockchain. But it remains an experimental proposal; the mechanism for securely moving bitcoin into and out of the shielded system is still in development, and surrounding metadata could still expose users to surveillance.

Lightning Network | Researchers Build Quantum-Resistant Prototype

The Lightning Network, a payment system for making fast, low-cost Bitcoin transactions, now has its first proof of concept for operating in a world with quantum computers. Researchers at East Texas A&M University published PQLN (Post-Quantum Lightning Network), a design led by Ahmet Kurt that replaces several of Lightning’s cryptographic protections with newer algorithms intended to remain secure even against sufficiently powerful quantum computers. The changes protect how Lightning nodes communicate, route payments, and exchange invoices without requiring any modification to Bitcoin’s consensus rules. Kurt also released a research fork of rust-lightning that implements the approach. Learn about this proof-of-concept here.

In context: Today’s quantum computers do not pose an immediate threat to Bitcoin, but the Lightning Network’s protocol must be upgraded before such a threat becomes a reality, not after. The main tradeoff is efficiency. In testing, a PQLN node (a computer running the new Lightning Network software) had to download roughly 10 times as much data and store nine times as much as a standard Lightning node. But as storage and bandwidth capacity increase with technological advancements, concepts like these move closer to reality.

x402 | Adds Bitcoin Lightning Payments to Internet Payment Standard

x402, an open standard for online payments, has added support for the Bitcoin Lightning Network. Previously, x402 prioritized support for other digital assets and stablecoins. In simple terms, x402 lets a website or app request payment directly when someone tries to access a paid service, rather than sending them to a separate checkout page. A newly merged contribution from Bitcoin developer Ben Carman gives developers a standard way to request and verify Lightning payments through that system, making it easier for websites, apps, and AI agents to accept bitcoin automatically.

Why this matters: Internet payments still largely depend on accounts, payment processors, and other intermediaries. Adding Lightning to an open web-payment standard creates another path for people (and, increasingly, AI agents) to pay directly with bitcoin without relying on those traditional rails.

Obscura VPN | Launches on Linux and Adopts GPLv3 License

Obscura VPN, a privacy-focused virtual private network that encrypts users’ internet traffic to shield them from authoritarian regimes and surveillant internet providers, is now available on Linux. The release brings official support for several of the most widely used Linux distributions, including Debian, Ubuntu, Fedora, and Arch. Obscura also relicensed its software under GPLv3, a widely used open-source license that allows anyone to inspect, modify, and redistribute the code as long as derivative versions remain open source.

Why this matters: Activists and others trying to bypass censorship or reduce surveillance often use VPNs, but users still have to trust the software handling their traffic. Making that software fully open source gives researchers and users more ability to inspect how it works, identify weaknesses, and verify that the tool is behaving as advertised. Linux support also expands access among technical users, activists, and organizations that rely on open-source operating systems.

Cashr | Combines Cashu Payments and Nostr Identity in One App

Cashr is a new Mac app in beta that combines a Cashu ecash wallet (which stores bitcoin-backed private digital tokens) with a Nostr signer (which holds the private key used to control a user’s Nostr identity and approve actions on their behalf). Running from the menu bar on a Mac, Cashr lets users connect Nostr apps, approve posts and other actions with their Nostr identity, send zaps (bitcoin micropayments), and pay Lightning invoices without opening separate wallets or signer apps. The goal is to make private payments and censorship-resistant communication easier to use together.

Why this matters: Freedom tech often becomes difficult to use when people need separate apps to communicate, control their identity, and make payments. Cashr brings some of those functions closer together. Users should still understand the tradeoff: Cashu ecash is not self-custodial bitcoin, and funds ultimately depend on the mint that issued them. Learn more about how ecash works here.

BITCOIN RECOMMENDED CONTENT

How Bitcoin Could Shape Kenya’s Economic Future with Robert Kirubi

In a new conversation with journalist Frank Corva, TALO Africa chairman Robert Kirubi discusses what might be next for Bitcoin in Kenya, following the rollout of the country’s new virtual asset service provider framework. Kirubi highlights years of groundwork by initiatives such as Gridless, Afribit, and Bitcoin Dada that have already built Bitcoin adoption from the grassroots up. The question now is whether greater institutional involvement will strengthen that ecosystem or pull it toward more centralized, permissioned channels.

Subscribe to newsletter 

Apply for a grant

Support our work

Visit our website