Except it doesn't. On Ethereum and other blockchains, that computer code runs everywhere, and every IP address is a gossip protocol that may have originated an undetermined number of hops backwards.

The lifecycle of an autonomous program (colloquially called smart contract) is that it is deployed by an address of a human being or that human being's server, and then the address' first transaction to the autonomous program is to delete the address' administrative capabilities of that program. Autonomous programs live on every validating node of that blockchain, and those validating nodes have no knowledge of the behavior of those programs. The deployment feature publishes the code on all validating nodes, no different than any other transaction. All future behavior of the autonomous program comes from individual users who do not control it.

So for what grandparent poster was referring to, stablecoins collateralized by digital assets, all the collateral is provided by users and all the stablecoins issued were caused by users providing collateral. Those users clearly do not run the autonomous program, no different than a depositor at a bank is not responsible for the bank when they ask for a loan from the bank. There is nobody to sanction, and there is no way to disable the autonomous program that accepts collateral and issues collateralized stablecoin loans.

Also, within EVMs (a type of development platform, growing category of blockchains), the users do not have a record of an IP address (although the node they connect to can record it, to mitigate that the user can run a relaying node from their personal computer. relaying nodes forward to validating nodes. no nodes in an EVM have knowledge of other nodes IP address and no nodes are even aware of which node saw a transaction first). And regarding the tracing of their onchain address, a user can provide collateral from a virgin address funded by other autonomous programs like Tornado which sufficiently mix funds. The programs and the regulators are not capable of factoring in our opinion about that.