FTX CEO Sam Bankman-Fried (SBF) says the crypto industry must maintain an open economy with peer-to-peer transfers and code-free, while regulatory oversight is essential for sustainable innovation said it is.
SBFMore It was published His thoughts on possible standards to help the crypto industry thrive while waiting for a more established framework by U.S. regulators.
1) As promised:
My current thoughts on crypto regulation.https://t.co/O2nG1VrW1l
—SBF (@SBF_FTX) October 19, 2022
Enforcing blocklists and sanctions
To check for illegal funding, the SBF suggested that the industry adopt a blocklist model rather than a whitelist model.
Blocklists allow all individuals to trade freely as long as they are not sanctioned for bad behavior, whereas allowedlists only open the door to a select few.
SBF argued that the blocklist model was more effective. This is because it allows transactions to flow seamlessly and prohibits illegal transfers when detected.
If a user’s address is illegally licensed, the SBF suggests that OFAC should provide an option to correct the address.
To remediate the address, the user simply transfers the authorized assets to the authorized address, which can be burned or frozen. Failure to return fraudulent funds will subject the User to sanctions laws.
Hacking and consumer protection
Following the high incidence of hacking in the crypto space, the SBF suggests that negotiations with hackers become more efficient on a 5:5 basis.
With this new standard, the first point of hacking is to complete the consumer.
Second, the hacker must promise to return 95% of the stolen funds. The 5% withheld is considered a generous bounty, and more white hat he could be an incentive for hackers to protect the industry.
Regarding customer protection, SBF proposes that retail investors should be provided with clear and comprehensive information about the assets they are considering.
In order to determine whether a user is suitable for using an investment product, the platform may choose a test-based mechanism that allows access to the product only to those who pass the test.
Licensing of DeFi protocols
According to the SBF, the protocol does not require a financial license for code to be deployed or for validators to confirm blocks, but it can be used to sell DeFi products to retail investors in the U.S., or a website for the DeFi protocol Some actions such as hosting may require certain licensing and KYC obligations.
“If you’re hosting a website that allows a US retailer to easily connect to and trade on a DEX, you’ll likely need to register as something of a broker-dealer.”
The SBF acknowledged that the DeFi protocol’s choice to obtain an operational license was a necessary compromise to continue crypto innovation.