Sam Bankman-Fried (SBF) has been warned that he risks eliminating the US from the crypto race, should a new set of standards proposed by the FTX chief ever be adopted.
Posted to the FTX website, SBF’s Possible Digital Asset Industry Standards covers seven areas the curly-haired billionaire says need to be regulated in order to “create clarity and protect customers” in the crypto industry. He describes it as “an industry norms manual.”
On his list, SBF outlines his desire to block sanctioned addresses, proposes a protocol that would give hackers a cut of stolen crypto (so long as assets are returned and disputes are settled), and lays out a three-step process that FTX will use to decide whether or not to list a crypto as a security.
It also includes plans for tokenizing stocks, making sure the ins and outs of crypto are clear to customers, and suggests a suitability test that would restrict customer access to crypto assets based on varying factors such as their net worth. Bankman-Fried also states he wants to keep peer-to-peer transfers, code and validators free from censorship but says regulation should apply when marketing this software to US retail.
Lastly he talks stablecoins, saying: “We need regulatory oversight and up-to-date public information and audits to confirm that dollar-backed stablecoins are, in fact, backed by the dollar.”
However, crypto personalities on Twitter quickly attacked SBF’s approach, labeling it as anti-DeFi and not in the interest of decentralization — a core belief of crypto for many.
SBF vs decentralization
Crypto sleuth @spreekaway (Spreek) noted how SBF’s proposals are antithetical to decentralization and points out that an ongoing blocklist working in real time would require constant updates and open up the potential for griefers to “frontrun” traders with “dusting” attacks.
“An app-level blacklist in real time seems totally unworkable to me,” said Spreek. “It would presumably have to be maintained by keepers constantly updating it and the bad guys can simply move their funds to a new address and swap in the same block.”
Spreek also called into question SBF’s motivations for formulating his standards, saying: “So, totally ineffective at stopping bad guys, but very effective at making defi useless for everyone else. Almost like there might be an ulterior motive here,” (our emphasis).
Normalizing on-chain freezes absolutely sucks
Crypto investor Ryan Sean Adams claims SBF’s approach would put DeFi on the same level as the Office of Foreign Assets Control. And that, in his words “absolutely sucks.”
Adams’ main bone of contention seems to be that adopting SBF’s proposal would normalize on-chain freezes. In response, he said, “The solution isn’t to apply the old CeFi rules to DeFi. The regulation should approach DeFi from first principles.”
SBF doesn’t care about decentralization
According to @iamDCinvestor, SBF straight-up doesn’t give a damn about decentralization. In a number of tweets, they hit back at SBF’s claims that, “The clearest way to help protect investors is to provide transparency and prevent scams.”
While DCinvestor does agree that SBF is transparent, it’s only in so far as his desire to “siphon value out of your account into whatever causes he claims to care about.”
Oh, and if you’re on his side, you’re probably a pathetic simp.
The emperor has no clothes
A particularly savage takedown of SBF’s crypto standards came from Alex Valaitis, who called their publication the “emperor has no clothes moment for FTX.”
“Deep down everyone knew he was not on the side of crypto & the people,” said Valaitis.
SBF is a shocking grifter
Aside from branding SBF a “centralized exchange grifter,” Ethereum maxi @econoar is apparently baffled by the number of people willing to rush to the defense of people like the fuzzy billionaire, saying, “the hero worship of some of these people over the years is mind-blowing to me.”
Bringing to mind a Colombian drug lord
Not content with posting an online poll asking if SBF is “based and autistic” or a “WEF sold out capitalist,” Autism Capital goes on to compare him to one of the 20th century’s most infamous figures.
“Public sentiment not looking good. Sam is losing the people. Needs to metaphorically build more soccer stadiums for the community a la Pablo Escobar.”