SBF’s Views on Centralized Industry Standards Clashes to Crypto Community

• SBF represents his views on the necessary crypto regulations.
• The solutions according to the draft.
• Let’s know the reaction of the crypto community.

Ideas of crypto regulations and industry standards of Billionaire Sam Bankman-Fried (SBF) are not soothing to everyone. 

On October 20, in his tweet, SBF posted- “I’m optimistic that we’re making progress on that last point. I’m optimistic, for instance, that the Stabenow-Boozman Bill would protect customers while also protecting economic freedom, and that federal regulators are making progress towards thoughtful frameworks.”

On October 3, 2022, U.S. Senators Debbie Stabenow, John Boozman and others introduced the Digital Commodities Consumer Protection Act of 2022. This essential framework will protect customers and our markets. 

Senator Stabenow said- “One in five Americans have used or traded digital assets, but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk.That’s why we are closing regulatory gaps and requiring that these markets operate under straightforward rules that protect customers and keep our financial system safe.”

What Does Draft Say?

The Possible Digital Asset Industry Standards is posted on the official FTX Policy website consisting of everything mentioned as a draft proposal of current regulations and set of industry standards. The idea is suggested to “create clarity and protect customers while waiting for full federal regulatory regimes.”

The CEO of crypto  derivatives giant, FTX, SBF remarks about the crypto regulatory system. He states- “It is really interesting to be at the forefront of crypto governance thinking and to see every part of the process up close.”

He directs to the regulations that need to be imposed on Stablecoins and “up-to-date information and audits to confirm that dollar-backed stablecoins are,in fact,backed by the dollar.”

Talking of decentralized finance (DeFi), he said- “This is, frankly, one of the trickiest areas to get right. The most important thing is that we not jump the gun: that industry, regulators, and lawmakers work collaboratively 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 blocklist is a good balance: prohibiting illegal transfers and freezing funds associated with financial crimes while otherwise allowing commerce.”

It’s also clearly specifies the requirement of allowist to transact so as 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 scam, illicit finance, etc.) is absolutely necessary.”

Crypto Community Criticized

In both of these aspects, it wholly abandons the “decentralized” part of DeFi, changing it again to the old form of centralized finance or traditional finance. One of them criticizing the idea said- “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?” This finally has 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 monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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