Another Day in Crypto #97 - SBF Responses
Curating some crypto content from around the web.
Hello everyone,
How are you? Hope you’re doing well!
As always - this is most definitely Not Financial Advice.
Everything I express here is only my opinion and perception of the market, eco systems and communities.
Do not treat any of it as an absolute fact - please do your own due diligence.
Always.
Now, let’s look at one of the most interesting stories from the recent few days -
SBF’s thread and article - and the responses it got.
SBF:
2) At a high level:
a) we need regulatory oversight and customer protection
b) we need to ensure an open, free economy, where peer to peer transfers, code, validators, etc. are presumptively free
c) we should establish regulation--and until then standards--to ensure (a/b)
Responses mainly have one tone, as you’ll notice.
Makot0x was direct.
@SBF_FTX your exchange frequently engages is predatory practices on retail and even just yesterday went down during the Aptos launch trapping many traders in positions, if you want to talk about customer protection maybe start with your own backyard first
Amadeo was harsh.
@SBF_FTX Does "customer protection" include protection from you and Trabucco when you decide to farm & dump tokens on retail?
Exonumia was even harsher:
@SBF_FTX Tell those Orwellian Overlords to GFT! They need regulations to stay in power it’s as simple as that.
Let’s move to RSA’s response.
@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.
Now let’s look at some of the talks after that response.
SBF replied:
@RyanSAdams Right now devs can’t write code in the US without fear of requiring a license they couldn’t possibly get, and you can’t launch a token without fear of prosecution for not completing a registration no one could complete.
If the industry argues for no regs this is what we get.
@SBF_FTX The solution isn't to apply the old CeFi rules to DeFi.
The regulation should approach DeFi from first principles.
@RyanSAdams I totally agree!
And I think it is, slowly, moving in that direction.
The way we continue to do that is by working constructively.
If we revolt, as an industry, against all regulation, the result won't be good.
@SBF_FTX We’re not revoting against all regulation.
We’re revolution against bad regulation.
We very much want better regulation for crypto.
But much of what you proposed for DeFi is a non starter.
I pray to god nothing like this ends up in the DCCPA. We’d have to revolt.
fiskantes also replied to SBF:
@SBF_FTX @RyanSAdams "If the industry argues for no regs this is what we get."
This is a strawman, arguing against bad reg doesn't mean arguing for no reg
@SBF_FTX @RyanSAdams In general much lighter on "retail protection" (which never really worked, retail gets rekt even on regulated centralized venues like your exchange anyway), honest actors are forced to do it with no real benefit to anyone and scams don't do it anyway...
And _gabrielShapir0 joined the conversation with his perspective.
@SBF_FTX @Fiskantes @RyanSAdams @SBF_FTX for DeFi there should be a detailed notice & disclosure regime--no permissioning/gating by regulators, no you can launch only if you follow "principles", etc.
just disclose all material facts, file publicly, keep up to date, be liable for fraud if wrong
@lex_node @Fiskantes @RyanSAdams high level I think that sounds reasonable but also I think actually legislating that would be a mess and extremely controversial -- mostly I think it's not time yet to solidify DeFi regimes
@SBF_FTX @Fiskantes @RyanSAdams agreed, but you see how aggro CFTC on Ooki protocol?
we can't just hand over more blanket discretionary power to them--need a carve out at least that DeFi devs/deployers aren't ipso facto 'facilities'
@SBF_FTX @Fiskantes @RyanSAdams respectfully, I also think the take on DeFi "front-ends" is completely wrong--these are merely specialized block explorers that provide data & generate a JSON object that the *user* can then send *themselves* to the blockchain--websites are not brokers/intermediaries
@SBF_FTX @Fiskantes @RyanSAdams if websites that assist a user with generating a JSON object that they *could* use to communicate with a miner/validator require broker regulations, then why not an article about how to generate a JSON object? that's assistance too; it's a slippery slope that goes way past crypto
Next - DCinvestor.eth was also vocal about this SBF article.
i am not and never have been a FTX customer,
but from now on i will boycott any product, service, or personality sponsored by them
we are not aligned, and they are not good for the decentralized space
enough is enough
crypto either survives as a decentralization-first movement, or crypto dies
and if crypto dies, we will eventually find our civilization in a surveil-and-control morass on private CBDCs, inevitably abused, from which we may not escape for centuries
this is not hyperbole
And so were, of course - Autism Capital.
They tweeted this and share this next tweet by rekt:
The industry is turning on Sam. We knew this day would come where the main character becomes the villain. It’s hard to watch. https://t.co/VxuywHxfCe
rekt @RektHQ
We’ll get back to both these accounts soon enough.
rekt’s story:
After aggressively farming many of DeFi’s most lucrative opportunities, @SBF_FTX is now suggesting his own industry standards, many of which go against crypto's core ideals.
Sam says we need “customer protection”.
But from who?
rekt investigates.
SBF said this.
Autism Capital replied:
@SBF_FTX @avi_eisen @RektHQ You’re losing the plot. You need to talk to your PR team. You’re making the wrong moves…
@AutismCapital @SBF_FTX @avi_eisen @RektHQ you know it's getting bad when autism cap is turning on you
RYAN SΞAN ADAMS tweeted this:
This response by @ErikVoorhees to @SBF_FTX's proposed crypto regulation is exactly what I would have written if I had the skill. 👏👏👏
SBF agreed to come on @BanklessHQ next Friday...
Should we invite Voorhees too?
moneyandstate.com/blog/response-…
This is Erik Voorhees’s response tp SBF:
"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
moneyandstate.com/blog/response-…
#bitcoin #defi #ethereum #crypto #liberty @ftx_app
Looks like we’re gonna have an interesting interview to watch.
For a promo, look at this talk between the two after Erik Voorhees replied to the original SBF tweet:
@ErikVoorhees eh so I think I feel not very heard by you on blocklists?
like, I don't know how many times I wrote--both in my post and in my tweets--that I *don't* think it should mean that e.g. validators and blockchains are police, but my reading of your post implies that you think I did?
@SBF_FTX From your original post, it isn't clear where/how you draw the line. I think this is why so many have been upset about.
"Everyone should respect OFAC’s sanctions lists"
Everyone? Every American or all humans? Should a protocol developer from Japan be blocking all Iranians?
@ErikVoorhees Hear you on that!
From the post:
"Similarly, validators have a core duty to correctly validate blocks-not to judge or police them"
"Validators themselves purely have the goal of confirming that proposed blocks..., not separately parsing and policing regulatory content"
@SBF_FTX That's well said, but then... why should a validator just "process the data" but a front-end dev should be making AML judgements?
^ this is the fundamental incongruity of your post and the most important to address.
@ErikVoorhees I think that making the distinction between US-based front-ends vs validators/smart contracts is the compromise to make, practically: it preserves the core freedom while accepting that things that look like BDs will register as such.
But one could try a different line instead!
At this point, señor doggo replied, and this next exchange between him and Nick J | nickjackman. was something I found very interesting:
@fubuloubu @SBF_FTX @ErikVoorhees Very sophisticated take maybe take this to congress and we can just wrap it up there hey
@NickPJackman @SBF_FTX @ErikVoorhees I wish. Would be hella better than "wait, bundling these thoughts into a software package should be illegal"
@NickPJackman @SBF_FTX @ErikVoorhees I completely agree, but here we are, arguing if certain open source code should be regulated while others aren't
@NickPJackman @SBF_FTX @ErikVoorhees A lot of this stems from a desire to "just throw regulators a bone so they leave us alone" which is not only a grave tactical error and completely inconsistent with how defining "good" regulation works, but also isn't even the right set of parties to go about it with
@fubuloubu @SBF_FTX @ErikVoorhees The argument that "software is software" and that this should be the states official position is what I was saying is silly. Maybe you don't accept the role of the state to regulate but it is a reality and attempts to make it sensible are... Ok? So is SBF making his case?
@NickPJackman @SBF_FTX @ErikVoorhees Regulating thought is an unacceptable position, not something I think is warranted.
Regulating people/entities is a perfectly acceptable position. There are a range of activities that warrant regulation, typically when there are issues of trust and transparency at play.
@NickPJackman @SBF_FTX @ErikVoorhees SBF is more than welcome to state his case in a public forum, just as I am more than welcome to dispute it and engage in proper dialogue.
That's how good positions get made!
@fubuloubu @SBF_FTX @ErikVoorhees Code and thought are different things, no?
Are you saying that the US shouldn't have any crypto regulations? Software is software and that's all that ought to be said on the matter?
@NickPJackman @SBF_FTX @ErikVoorhees Nope. I think common sense regulations on promoters makes a ton of sense, and CEXs too, since they take custody and have to have a ton of trust in their custody practices.
I think that people using p2p software to interact with each other should largely be regulation-free
I tweeted:
This.
With freedom - comes responsibility.
With responsibility - comes freedom.
señor doggo 🏴🏴☠️ @fubuloubu
Ok, let’s start wrapping up with some more responses from some folks.
do you guys remember when like 50% of CREAM deposits were FTT? probably even worse on the Solana platforms
and SBF borrowed a few hundred milly to farm and dump every DeFi protocol he could while listing perps on FTX?
lmao, can't believe that all actually happened
@iamDCinvestor I still can't get over the use FTT and SRM as collateral to borrow from Celsius, then buy them after sell down because they have bad loans on the book they can't liquidate...
Goblin_-Toshi added this:
DCinvestor.eth also tweeted this:
SBF will soon transition to damage control mode
maybe some charitable donations and new billboard campaigns
take a polaroid, do not forget
Cryptofungus with this funny one:
scupytrooples.eth tweeted this:
Yea, I'm not happy with @SBF_FTX 's proposal. It's no secret.
Yes, I went off on his practices that I think are injurious to the space.
Yes, I'd prefer he didn't industrial farm and nuke everything.
But I hope he listens to the outcry and reconsiders his proposal.
If he can prove he's actually advocating for crypto and DeFi's interest (and not just his), I'm more than willing to bury the hatchet
And zefram.eth with his own take on regulation:
Remember, any mention of “regulation” means adding the government as a middleman.
The point of crypto & blockchain is to eliminate middlemen & replace them with code.
Crypto regulation (beyond trading) is an oxymoron and a nonstarter.
And let’s end it with this thread by those who used to be Sam’s biggest fans -
Autism Capital.
This whole situation is unfortunate to us. From day one we knew who Sam was. A ruthless and cunning operator whose ambition paired with brilliant autism would allow him to take over. We wanted to support his ambition. We believed his self serving incentive would align with Crypto
We publicly warned Sam repeatedly to not lose the plot. We engaged with him humorously online to try to keep him “based”. At the beginning things were fine. As he rose and his influence grew he started valuing optics more and distanced himself from the same culture that made him.
Around the time he started aligning himself with Tom Brady, Gisele Bundchen as an “ESG Advisor”, SALT conference in the Bahamas, the hiring of Lauren-Remington Platt as FTX’s “Head of fashion and luxury partnerships”, interaction with the Greg twitter account, Sam lost the crowd.
He started valuing hypergrowth optics and shunned the community that made him. He then only came to Twitter to post thought leadership threads, policy statement proposals, new FTX features, pretending to promote SOL or FTT, or saying he would be on CNBC in 3 minutes.
The sentiment palpably changed towards Sam around this time. We ran public Twitter polls to signal to him and his team the bloom was off the rose, but they kept moving forward on their path, likely advised by a Madison Avenue PR agency who did not understand Crypto culture at all
Fast forward to today. After an optically horrendous policy guidance, Sam is now spending his time defensive on Twitter, angrily calling out people that are upset with a feeling of betrayal, claiming their takes are “the dumbest thing ever.” or “fucking stupid.” Sam is flustered.
All of this because deep down, while his profit maximization and ambition supersede everything else, he still values the community and knows that he lost the crowd.
Our main character is minutes away from completing his Anakin to Vader timeline.
Don’t put on the helmet, Sam.
Thanks for reading everyone, have a great day!
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Some kind of headers in bold, list items, horizontal separators.