Bankman-Fried Fools Regulators By Hijacking Centralized Finance

FTX CEO Sam Bankman-Fried has proposed a plan for regulators to look into decentralized finance - without a word on centralized exchanges like his.< /p> Opinion
Last month's proposal by Sam Bankman-Fried, CEO of crypto exchange FTX, for regulators to establish a litany of standards for the cryptocurrency industry poses an existential threat to finance platforms decentralized (DeFi) and entrepreneurship. As one of the privileged few with the capital and influence to push the discussion around crypto regulation forward, Bankman-Fried, also known as SBF, is expected to take a stand to protect DeFi in directing regulators to where they are most needed: centralized finance platforms (CeFi) and centralized exchanges (CEX).

In a section of its plan for regulatory oversight and industry standards regarding DeFi, SBF asserts the importance of maintaining permissionless smart contracts and validators. He goes on to propose that DeFi front-end providers, website hosts, and even related marketers should be required to register as traditional financial brokers.

The implication of such a classification would subject DeFi agents to a host of strict regulatory policies and Know Your Customer procedures. Even hiring the highly specialized professionals needed to handle the relevant legal responsibilities requires enormous capital and resources.

Related: Facebook is on a quest to destroy the metaverse and Web3

DeFi is inherently self-regulating. Any regulatory measure would be redundant at best and stifling at worst. Nonetheless, anything resembling broker regulation would effectively crush the entrepreneurial spirit of DeFi and ultimately shift DeFi Legos into the hands of a small group of centralized crypto powerhouses, namely Binance and SBF's FTX exchange.

Perhaps ironically, it is these highly centralized platforms and their opaque operations that require the most regulation.
The Great Financial Crisis: A Regulator's Dream Come True
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Crypto Nov 2, 2022 0 56 Add to Reading List

Bankman-Fried Fools Regulators By Hijacking Centralized Finance

FTX CEO Sam Bankman-Fried has proposed a plan for regulators to look into decentralized finance - without a word on centralized exchanges like his.< /p> Bankman-Fried misguides regulators by directing them away from centralized finance Opinion

Last month's proposal by Sam Bankman-Fried, CEO of crypto exchange FTX, for regulators to establish a litany of standards for the cryptocurrency industry poses an existential threat to finance platforms decentralized (DeFi) and entrepreneurship. As one of the privileged few with the capital and influence to push the discussion around crypto regulation forward, Bankman-Fried, also known as SBF, is expected to take a stand to protect DeFi in directing regulators to where they are most needed: centralized finance platforms (CeFi) and centralized exchanges (CEX).

In a section of its plan for regulatory oversight and industry standards regarding DeFi, SBF asserts the importance of maintaining permissionless smart contracts and validators. He goes on to propose that DeFi front-end providers, website hosts, and even related marketers should be required to register as traditional financial brokers.

The implication of such a classification would subject DeFi agents to a host of strict regulatory policies and Know Your Customer procedures. Even hiring the highly specialized professionals needed to handle the relevant legal responsibilities requires enormous capital and resources.

Related: Facebook is on a quest to destroy the metaverse and Web3

DeFi is inherently self-regulating. Any regulatory measure would be redundant at best and stifling at worst. Nonetheless, anything resembling broker regulation would effectively crush the entrepreneurial spirit of DeFi and ultimately shift DeFi Legos into the hands of a small group of centralized crypto powerhouses, namely Binance and SBF's FTX exchange.

Perhaps ironically, it is these highly centralized platforms and their opaque operations that require the most regulation.

The Great Financial Crisis: A Regulator's Dream Come True

It would be childish to suggest that regulation is useless. Here's what the regulations do very w...