FTX

FTX CEO Criticized By DeFi Proponents For His Proposal

  • The founder and CEO of popular crypto exchange FTX, Sam Bankman-Fried’s recent “industry norm manual” has prompted DeFi proponents to massively criticize him on Twitter. 
  • FTX founder believes that it is “extremely important that on-chain code and DeFi remain free and open, and uncensored.” 
  • Others contend that the regulations proposed by the FTX CEO are essential to attracting more institutions to the crypto industry.

American entrepreneur Sam Bankman-Fried’s recent “industry norm manual”, which proposed regulatory control over the websites facilitating trading on decentralized exchanges (DEXs), has prompted DeFi proponents to massively criticize him on Twitter. 

To DeFi proponents, DEXs like Uniswap, which enable retail traders to access DeFi protocols, are different entities to the classic central counterparties needed in traditional finance because they solely exist as code that enables people to trade with one another.

However, SBF wrote on Wednesday:

“If you host a website that makes it easy for U.S. retail to connect to and trade on a DEX, you would likely have to register it as something like a broker-dealer/FCM/etc. You would also potentially have [know your customer] obligations.”

At the sam time, FTX founder also believes that it is “extremely important that on-chain code and DeFi remain free and open, and uncensored.” 

Critics echoed massive opposition

According to a recent report by The Block, scupytrooples, the anonymous founder of the DeFi protocol Alchemix, scupytrooples, has emerged as one of the most vociferous critic of Bankman-Fried.

They stated:

“I see them using the playbook of large corporations, where they ascend to the top, and then get involved in lobbying to make rules favorable for them to hurt the competition, and ultimately cement their position there. No different from Amazon, Exxon Mobil, Goldman, etc.”

Scupytrooples went on to accuse SBF of not caring about the crypto industry. 

Moreover, renowned independent Ethereum educator Anthony Sassano also criticized the FTX CEO by calling him a “cancer” to the crypto ecosystem.

He wrote to his 225,000 Twitter followers:

“Anyone supporting him and his cronies should be ashamed.”

Those who supported Bankman-Fried commonly quoted the idea that regulation of the cryptocurrency sector is inevitable. One account shared, and Bankman-Fried retweeted, “Better to have a dialogue about it than to pretend that crypto is immune to regulation or ought not to be regulated.”

Others contend that the regulations proposed by the FTX CEO are essential to attracting more institutions to the crypto industry. Meanwhile, the billionaire himself stated that he is open to the possibility that he is wrong.

SBF has testified before the United States House Committee on Agriculture and made significant donations to American politicians.

Critics contend that SBF is using his powers to promote his own business rather than the interests of the entire industry. However, regulators in the United States, specifically Texas authorities, are looking into FTX’s compliance with financial regulations.

It is also imperative to note that FTX crypto exchange has been also working on a version 2 which will improve upon the existing infrastruture and also bring a number of new features to the platform, as per a previous report from BitcoinWisdom.

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Parth Dubey Verified

A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.

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