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Sam Bankman-Fried advises a new crypto regulatory approach

Sam Bankman-Fried

Sam Bankman-Fried has waded into the issues regarding regulatory frameworks and compliance in the crypto market. Regulation has been one of the most talked about issues, with most analysts suggesting that agencies are not doing an excellent job. However, the FTX boss intimated to the general public his ideal framework, which he would like to see take shape in the crypto market. Although he craves a free market for traders, he believes there should be restrictions.

Sam Bankman-Fried explains from his view

Sam Bankman-Fried mentioned that he prefers regulations with a ‘blocklist.’ This way, traders can carry out any activity they wish to until they go against rules and are added to the list. This is the direct opposite of a whitelist, where traders are granted an express entry to trade by adding them to a list.

According to Sam Bankman-Fried, there should be a database with a long list of addresses tied to illicit activities in the past. However, he maintains that peer-to-peer transactions should be allowed without a hitch unless the address belongs to a trader undergoing sanction. These thoughts are contained in a document authored by the FTX boss and are available on its website.

The FTX boss dissects the document

The FTX CEO also claimed that using whitelists would create a scenario where some small-scale traders would be frozen out of the market. However, he noted that it would enable regulatory agencies to monitor the accounts on the list and flag them for irregularities. He also claims that blocklists will bring a balance that the market will need. Sam Bankman-Fried claimed that it would help regulators enforce laws while also protecting the details of the users of such accounts. However, there is also a burden of enforcing the new rules on users in the market.

The document cited swift action to address engaged in fraud. It questioned what the authorities would do after the act had been committed to sending out a memo to all agencies. In the blockchain space, the number of addresses is more significant than the number of tokens. This way, illicit funds can be moved through a long list of addresses before regulators notice. It also leaves the authorities monitoring and adding an infinite number of addresses tied to a crime. The action also leaves much to be desired about the proposal. Hackers can decide to dump illicit funds into addresses belonging to innocent traders.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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