Sam Bankman-Fried outlines his vision for regulating the cryptocurrency industry

The CEO of the cryptocurrency exchange FTX Sam Bankman-Fried outlined his vision for regulating the crypto industry. One of the most important provisions he cited was adherence to the sanctions regime.

1) As promised:

My current thoughts on crypto regulation.https://t.co/O2nG1VrW1l

— SBF (@SBF_FTX) October 19, 2022

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\”We need fast and reliable lists of addresses linked to illicit financing,\” Bankman-Fried said.

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In his view, such a solution would enable trading platforms to comply with the sanctions regime. The blocklist would be maintained in real time by a centralized organization such as OFAC, added the founder of FTX.

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\”There should be a ‘frozen funds’ address — perhaps for burning, perhaps owned by OFAC — to which you can send illicit assets if you obtain them,\” described the mechanism by Bankman-Fried.

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According to him, this will give platforms the ability to remediate in case they receive assets from a sanctioned address.

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Bankman-Fried argues that the industry should establish standards for protecting and informing retail customers. The prospect that some tokens may be classified as securities should not pose a problem for the crypto industry, he says.

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\”Ideally, we should be an industry in which being classified as a security is not a bad thing: there are clear registration processes that protect customers and enable innovation,\” he emphasised.

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One of the industry’s major problems, he identified, is security breaches and hacks. He believes a practice whereby projects pay hackers rewards in exchange for returning a larger portion of stolen funds could be a solution. As a standard, he proposed 5% of the total amount.

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On stablecoins, Bankman-Fried noted that they \”provide enormous opportunities to modernize and democratize payments.\” But all \”stablecoins\” must be backed by adequate, reliable reserves.

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Traders involved in the process of issuing and redeeming stablecoins must apply proper KYC procedures, he added.

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In December 2021, in the run-up to hearings before the U.S. House of Representatives, FTX published an article outlining its view on fair regulation of the digital assets market.

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