SBF’s view of centralized industry standards clashes with the crypto community
- SBF represents his view on necessary crypto regulations.
- The solutions according to the draft.
- Let us know the reaction of the crypto community.
Ideas about crypto regulations and industry standards of billionaire Sam Bankman-Fried (SBF) are not reassuring to everyone.
On October 20, SBF wrote in its tweet: “I am optimistic that we are making progress on the last point. I am optimistic, for example, that the Stabenow-Boozman bill will protect consumers while protecting financial freedom, and that federal regulators are making progress toward thoughtful frameworks.”
On October 3, 2022, US Senators Debbie Stabenow, John Boozman and others introduced the Digital Commodities Consumer Protection Act of 2022. This essential framework will protect consumers and our markets.
Senator Stabenow said: “One in five Americans have used or traded digital assets, but these markets lack the transparency and accountability they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk. That’s why we’re closing regulatory loopholes and require these markets to operate under simple rules that protect customers and keep our financial system safe.”
What does Draft say?
Possible Digital Asset Industry Standards are posted on the official FTX Policy website which consists of everything mentioned as a draft proposal for current regulations and set of industry standards. The idea is proposed to “create clarity and protect customers while they await full federal regulatory regimes.”
CEO of crypto derivatives giant, FTX, SBF comments on the crypto regulatory system. He states- “It’s really interesting to be at the forefront of crypto governance thinking and to see all parts of the process up close.”
He refers to the regulations that must be imposed on Stablecoins and “updated information and audits to confirm that dollar-backed stablecoins are indeed backed by the dollar.”
Speaking about decentralized finance (DeFi), he said: “This is frankly one of the most difficult areas to get right. The most important thing is that we don’t jump the gun: that industry, regulators and legislators work together and thoughtfully together.”
It is written that it should be treated as an industry norms manual, trying to establish consensus. It states that – “Maintaining a blocking list is a fine balance: prohibiting illegal transfers and freezing funds associated with financial crime while otherwise allowing trade.”
It also clearly specifies the requirement for a permit to execute transactions to break down the process. It mentions: “Maintaining the presumptive freedom of peer-to-peer transfers and decentralized blockchains (unless there is specific evidence of a fraud, illicit finance, etc.) is absolutely necessary.”
The crypto community criticized
In both of these aspects, it completely abandons the “decentralized” part of DeFi, changing it again to the old form of centralized finance or traditional finance. One of those criticizing the idea said: “So your solution to the very real and challenging questions of how to regulate a technology that could revolutionize the financial system is to turn it into the existing system?” This has finally given rise to the conflicts.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional money exchange systems. She is also fascinated by the blockchain technology and its function.
