SAM BANKMAN-FRIED CRYPTO REGULATION RECOMMENDATIONS

As know already that FTX is one of the most influential crypto companies, the founder of FTX Sam Bankmam-Fried recommended that crypto should be regulated. Sam's recommendation was taken seriously because of his influence but not everybody liked what he is recommending. What the CEO FTX was proposing is meant to be a draft that will stimulate possible crypto regulation. Although, Sam and FTX have some influence in the crypto world they are not the only entity with this kind of influence. You should know that this is not the only time Sam and FTX will put out a crypto regulation suggestion.

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Coinbase and Binance are also putting out their crypto regulation recommendations early thing year. The first set of recommendations for Sam and FTX is about the sanctions allow list and blocklist. The CEO of FTX is in favor of a blocklist and that means some wallet addresses will be prevented from interacting with the rest of the ecosystem. Although, this is a good idea but it has some problems attached to it. Block will be used to restrict bad action in the crypto world and it will also be used to restrict anyone who opposed the entity that decides which wallets are blocked.

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Sam and FTX suggest that the office of OFAC should be the entity that will be in charge of the cryptocurrency blocklist. No doubt that is a problem because the OFAC is part of the US government and things could become terrible. The is also a problem of dusting and that is when a crypto wallet address sends crypto to another wallet address that has not participated in any wrong activity. This became a problem after the government-sanctioned Tornado Cash. Sam and FTX also recommend they develop standardized cryptocurrency wallet addresses suspected of engaging in malicious activities. This will be shared would be shared with other centralized companies.

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Sam and FTX recommend that a blocklist should be enforced on a chain and that means the crypto wallet that engages in malicious activities will be automatically frozen immediately. Sam and FTX also gave some recommendations about the crypto hack to know who is responsible for the hack. He recommends that the entity should create a list of crypto wallets that engaged with these hacks so that they could be blocked.

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Regarding the retrieval of assets from a hack, Sam said a lot of the time there are negotiations between hackers and the affected platform. He also said it is not often clear whether the hacker did anything legally wrong. This is because most of the huge hacks are flash loans. You should know that a flash loan is borrowing a huge amount of crypto assets to carry out an arbitrage trade. Sam recommends a way that the hacker should be compensated and the hacked asset should be returned. Assuming the hackers didn't do anything that goes against the protocol, then the person will take 5% of the asset as compensation for discovering the exploit in the code. Also, the hacker must return the asset within 24 hours, otherwise, the hacker will be tag a bad actor and the appropriate authority will get involved.

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