- Sam Bank Fried has suggested a list of crypto frameworks
- The suggestions have met with a lot of criticism from the crypto community
- Coinbase CEO Biran Armstrong responded with counter suggestions
Sam Bankman-Fried (SBF) recently prepared a list of recommended guidelines for the cryptocurrency business, which he published on the FTX Policy blog on October 19.
The post addresses several issues that regulators and operators must address, with an emphasis on the United States. More specifically, SBF proposed a strategy for determining whether or not assets in the United States should be treated as securities or commodities.
SBF “fundamentally” endorses “blocklists” as “the correct approach to sanctions compliance on blockchain environments,” despite noting that these proposals are just a “draft”. SBF opposes the notion of a peer-to-peer transfer “allowlist” that can force users to consent to such transfers and instead calls for “prohibiting illegal transfers and freezing funds associated with financial crimes while otherwise allowing commerce.”
SBF argued that adopting allowlists would be a major barrier to innovation and trade that “freezes out the economically disadvantaged.” However, the exchange warned that enabling all payments would invite financial criminality. FTX claims that blocklists provide a more natural equilibrium between the two.
The suggestions met with a lot of criticism. Many have alleged that SBF is trying to “kill” defi or pushing for regulations that solely benefit FTX.
“FTX is spending money to push a law thru congress that may force defi protocols to operate like centralized exchanges,” Scott, the anonymous founder of DeFi Pulse, tweeted.
Meanwhile, zefram, of NFT marketplace Sudoswap said:
However, not everyone has critiqued SBF. Coinbase founder and CEO Brian Armstrong lauded SBF and made some suggestions. In a detailed post titled ‘A Response to SBF and Principled Crypto Regulation’, Armstrong said, “Sam is a good actor” who’s trying to “make a productive contribution to crypto policy.”
Among the many tips, Armstrong advised FTX “draw a line” between reasonable private blacklists to combat fraud/theft and unreasonable coercive blacklists (whether at app or protocol layers), adding that the latter is “the path to tyranny.”
“Really appreciate all the feedback[..] In the end, a strong free decentralized economy is what matters,” SBF tweeted in response.
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