Earlier in the week FTX Founder and crypto influencer Sam Bankman-Fried addressed the regulation of the crypto industry and shared his ideas on how regulation could go. After he shared his ideas there were many critics of his proposal with some even going so far as to say that his ideas “suck.”
In one response it was questioned whether his ideas were in line with most of the early adopters of crypto. Crypto has changed a lot since the beginning of the technology with multiple governmental hands now grabbing at the technology. The core of crypto would be the freedom offered by crypto, freedom from banks and fees, freedom from the current regulations of a centralized banking society, and the freedom of total decentralization.
So your solution to the very real and challenging questions of how to properly regulate a technology that can revolutionize the financial system is to… turn it into the existing system? It seems as though your goals are not aligned with those of most of the early adopters.— exlawyer.eth/tez (@exlawyernft) October 20, 2022
The crypto community is a bit stressed at the moment as the future of the technology is at a crossroads. Regulations are now being pushed on the technology and the community as a whole. Any regulations by the U.S will certainly change things for everyone involved in crypto. The regulations would either create mainstream adoption or deteriorate many of the core principles of crypto such as decentralization and the resistance to censorship.
At one point Sam made the comment that “both centralized and decentralized applications should “respect OFAC’s sanctions lists”
This also drew criticism by the founder of ShapeShift, Erik Vorhees who stated that the proposal was too positive towards the U.S Office of Foreign Assets Control
@SBF_FTX you can advocate Effective Altruism, or you can advocate banning 80 million innocent Iranians from the future of global finance.— Erik Voorhees (@ErikVoorhees) October 19, 2022
You can't do both.
Glorifying OFAC in proposed crypto-industry standards is a *non-starter.* https://t.co/DghCgqi0FA
It should be noted that Vorhees proceeded to write a blog post that deconstructed the proposal created by Bankman-Fried. In the blog post Vorhees states ” I appreciate that SBF welcomes feedback on his proposal, and since FTX currently endures substantial regulation, it’s understandable that he wants to help shape the future of this regulation.
Vorhees noted that he believes there should definitely be protections for consumers but is not sure the regulation plans by Sam are completely in line with what is needed within crypto. Vorhees took issue with the proposal to govern decentralized protocols under the Bank Secrecy Act stating “Sam’s suggestions regarding defi are the most problematic part of his blog”
SBF suggested that websites that allow reading and writing of defi contracts should be required to have licenses, thus stifling experimentation and creation in the space. In response to some of the criticisms Sam made an update to his original proposal and made the following response.
8) In particular, it is *not* making claims about what DeFi devs, smart contracts, and validators must do. It’s looking to eventually establish guidelines about how e.g. FTX’s platform–or Fidelity's–could interface with DeFi contracts.— SBF (@SBF_FTX) October 23, 2022
Another crypto investor was quick to let Bankman-Fried how much his proposal was not acceptable and how the regulations would completely erase the United States from the crypto sphere.
Sam.— RYAN SΞAN ADAMS 🤓 (@RyanSAdams) October 19, 2022
This absolutely sucks.
You're saying DeFi should be OFACed.
You're saying onchain freeze's should be normal.
You're saying DeFi front-ends to register as a broker-dealer.
No, this is not reasonable.
This would eliminate the U.S. from the crypto race. pic.twitter.com/AtlvHgaAkL
Sam Bankman -Fried was interested in the rebuttals from the community and spoke on how he was excited to be able to speak with others and learn from others with dialogue about regulations. It seemed as if he was very positive towards all feedback and willing to be open in discussing possible ways to properly regulate crypto.
17) Anyway: I totally understand that lots of people will disagree with me on various points. That’s great—it means I have people to learn from.— SBF (@SBF_FTX) October 23, 2022
And I really do think that regulation is going to get better, clearer, and create pathways for crypto to come back onshore.
In another tweet Sam reposts a video of Bitboy going on a rant about crypto regulations and him personally stating that he would feel as strongly about something as Bitboy does about him. In the video Bitboy states that SBF was trying to “permanently ruin it”
18)While I don’t myself wear glasses, I’m excited to join our bespectacled brethren. It’s a huge honor to see the passion and intensity with which Bitboy regards me.— SBF (@SBF_FTX) October 23, 2022
Maybe someday I’ll feel as strongly about something as he does about me.pic.twitter.com/dZykeECOir
Bitboy states that the already super rich are the ones saying they know what’s best and that is not the truth he states that he is for the people , subtly taking a dig at the FTX leader who has been well-known for his altruistic endeavors.
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