DeFi proponents criticize Sam Bankman-Fried for a regulatory proposal suggesting websites facilitating trading on decentralized exchanges should be regulated
I probably am wrong about some! But in the end the most important thing is to keep commerce and expression free. Scott / @scott_lew_is : now is the time to get loud and fight Dave Friedman / @friedmandave : Gave it a quick scan. The negative reactions are predictable and, I think, rather juvenile. Regulation is inevitable. Better to have a dialogue about it than to pretend that crypto is immune to regulation or ought not be regulated. https://twitter.com/... @petrifytcg : Unpopular opinion: I am intimately familiar with conversations happening with lawyers at public companies who want to get into crypto. @SBF_FTX is right. People might not appreciate that now, but they will in the future. @sbf_ftx : 9) Sixth, DeFi. 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. @sbf_ftx : 100% — in particular people are paying close attention to the language to make sure it doesn't end up killing DeFi, which is super important https://twitter.com/... @sbf_ftx : Thanks to everyone who gave feedback. At the very least, I'm going to update/edit to clarify that DeFi should not be censored. @twobitidiot : There are *a lot* of good people working on protecting DeFi in DC right now. This isn't like the infrastructure bill. We've got a night's watch at the wall this time. I'd take some deep breaths re DCCPA @sbf_ftx : @HsakaTrades USDT/BUSD/USDC could all get within the framework without substantial changes DAI needs a different framework, and should neither be licensed nor banned by this one McCoy / @chrisamccoy : There are no surprises here, all is reasonable (and predictable). It's also why legit and credibly neutral governance at layer one is so vital — it enables coordination on OFAC lists, etc. https://twitter.com/... Erik Voorhees / @erikvoorhees : @SBF_FTX you can advocate Effective Altruism, or you can advocate banning 80 million innocent Iranians from the future of global finance. You can't do both. Glorifying OFAC in proposed crypto-industry standards is a *non-starter.* https://twitter.com/... @degenspartan : fwiw, i reject sams thoughts too many pts to refute, so here's my simple regulatory idea my own suggestion is a resident opt out waiver of their rights to any help and social services from the govt, while still being liable for tax and KYCAML if they cash out into the country https://twitter.com/... @sassal0x : The “toxic ETH maxis” have been warning you about SBF for years but y'all didn't listen Now we're in this situation - congratulations, you played yourselves @dystopiabreaker : re: sam's proposal, if a defi dev publishes code that doesn't do ofac censorship, is that a crime now? how is that different from compelled speech? what is the enforcement mechanism @defikash : Regulatory oversight is inevitable and a good thing, especially if we want the industry and especially DeFi to thrive The way in which regulation can be enforced is the real alpha Just remember that DeFi is still at the bleeding edge, we are still early and still disrupting https://twitter.com/... Frank Chaparro / @fintechfrank : Sam Bankman-Fried draws fire from DeFi proponents after regulation proposal You either die a hero or live long enough to become a villain https://www.theblock.co/... @goldk3y_ : Sam Bankman advocating for regulation on hosting front ends and marketing. https://twitter.com/... https://twitter.com/... Jason Choi / @mrjasonchoi : This is a sensible stance for FTX to take as an exchange pushing to go mainstream in US - but it is one that also effectively neuters DeFi, esp in US. Reassuring to see pushback and also two-way discourse happening at least 👀 https://twitter.com/...
The BlockAdam James
Context & Ripple Effects
Sam Bankman-Fried had already joined crypto executives seeking CFTC-led oversight, making his proposal part of an effort to define a regulatory path for the sector rather than a sudden departure from it. The DeFi backlash exposes the fault line in that approach: whether regulation should reach the websites through which users access decentralized exchange trading.
The dispute matters because it centers on the interface layer, where a decentralized protocol can be accessed through identifiable operators and websites.
First-order effects
DeFi proponents are publicly contesting Bankman-Fried’s proposal, raising immediate resistance to treating decentralized-exchange websites as regulated trading facilitators.
Website operators that facilitate access to decentralized exchanges become the proposal’s direct compliance target, rather than the underlying protocols alone.
Second-order effects
DeFi teams face pressure to distinguish protocol infrastructure from user-facing interfaces, as the latter become the clearer point for regulatory obligations.
Bankman-Fried’s regulatory positioning with the CFTC is complicated by opposition from DeFi advocates whose products would be affected by the approach.
Third-order effects
If interface-focused regulation becomes the prevailing model, market access in DeFi will increasingly be shaped by the compliance choices of front-end operators rather than protocol code alone.
The episode points to a durable split within crypto between firms seeking formal regulatory accommodation and builders defending decentralized access layers from intermediary-style rules.
The trend: Crypto regulation is increasingly converging on interfaces and access points, turning governance of front ends into a central contest over who controls decentralized-market access.
@SBF_FTX Sam. With respect. This absolutely sucks. You're saying DeFi should be OFACed. You're saying onchain freeze's should be normal. You're saying DeFi front-ends to register as a broker-dealer. No, this is not reasonable. This would eliminate the U.S. from the crypto race. h…
If developers wish to subordinate their decentralized code to a blacklist, that's their choice. If developers are forced to subordinate their code, that is tyranny which must be resisted by every participant of this industry Great article @ErikVoorhees https://www.moneyandstate.…
“To the degree someone proposes a rule via regulation, we should employ a high degree of skepticism and caution, for they act without civility under the banner of violence.” My response to @SBF_FTX https://www.moneyandstate.com/ ... #bitcoin #defi #ethereum #crypto #liberty @ftx_…
Keeping DeFi and peer to peer transfers free is crucial. There are policies I honestly think are key to achieving that. I could be wrong about those policies—I probably am wrong about some! But in the end the most important thing is to keep commerce and expression free.
10) But we should make sure that code, peer to peer transfers, validators, etc. are free while also ensuring that retail-facing platforms and marketing build in customer protection.
@sassal0x Minted fake tokens on ftx to game balancer farming Attempted sushi takeover Listing perps on illiquid DeFi tokens to aid in their farm and dump effective altruism Suspected of liquidation hunting Low-ball CeFi bids post crash Lobbying against DeFi Not a good look bro!
Gave it a quick scan. The negative reactions are predictable and, I think, rather juvenile. Regulation is inevitable. Better to have a dialogue about it than to pretend that crypto is immune to regulation or ought not be regulated. https://twitter.com/...
Unpopular opinion: I am intimately familiar with conversations happening with lawyers at public companies who want to get into crypto. @SBF_FTX is right. People might not appreciate that now, but they will in the future.
9) Sixth, DeFi. 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.
Regulatory oversight is inevitable and a good thing, especially if we want the industry and especially DeFi to thrive The way in which regulation can be enforced is the real alpha Just remember that DeFi is still at the bleeding edge, we are still early and still disrupting https…
100% — in particular people are paying close attention to the language to make sure it doesn't end up killing DeFi, which is super important https://twitter.com/...
There are *a lot* of good people working on protecting DeFi in DC right now. This isn't like the infrastructure bill. We've got a night's watch at the wall this time. I'd take some deep breaths re DCCPA
@HsakaTrades USDT/BUSD/USDC could all get within the framework without substantial changes DAI needs a different framework, and should neither be licensed nor banned by this one
There are no surprises here, all is reasonable (and predictable). It's also why legit and credibly neutral governance at layer one is so vital — it enables coordination on OFAC lists, etc. https://twitter.com/...
@SBF_FTX you can advocate Effective Altruism, or you can advocate banning 80 million innocent Iranians from the future of global finance. You can't do both. Glorifying OFAC in proposed crypto-industry standards is a *non-starter.* https://twitter.com/...
fwiw, i reject sams thoughts too many pts to refute, so here's my simple regulatory idea my own suggestion is a resident opt out waiver of their rights to any help and social services from the govt, while still being liable for tax and KYCAML if they cash out into the country htt…
The “toxic ETH maxis” have been warning you about SBF for years but y'all didn't listen Now we're in this situation - congratulations, you played yourselves
re: sam's proposal, if a defi dev publishes code that doesn't do ofac censorship, is that a crime now? how is that different from compelled speech? what is the enforcement mechanism
Sam Bankman-Fried draws fire from DeFi proponents after regulation proposal You either die a hero or live long enough to become a villain https://www.theblock.co/...
This is a sensible stance for FTX to take as an exchange pushing to go mainstream in US - but it is one that also effectively neuters DeFi, esp in US. Reassuring to see pushback and also two-way discourse happening at least 👀 https://twitter.com/...