Sam Bankman-Fried, CEO of crypto derivatives giant FTX, says the crypto regulatory ecosystem is on a knife’s edge right now.
“It’s been really interesting being at the forefront of crypto regulatory thought and actually getting to see each part of this process work up close,” Bankman-Fried said on the first episode of the “gm from Decrypt” podcast, adding that the crypto regulatory ecosystem is “very much sort of balanced on a knife’s edge in a lot of places in a lot of ways, and a lot of ways that I think are super interesting and are going to have really profound impacts on the ecosystem.”
SBF, as the brainy billionaire is known in crypto land, has certainly spent the past few months thinking about regulation. In December, he was among crypto CEOs who testified before Congress. Shortly after that, he told Decrypt that he felt the highlight of 2021 wasn’t his company’s massive user growth or its sports marketing spending spree, but the progress made on the regulatory front.
Even as he attempts to make nice with U.S. lawmakers, Bankman-Fried moved from Hong Kong to the Bahamas in September last year in pursuit of friendlier regulations. “There’s an actual regulatory framework for crypto in the Bahamas,” he said on the podcast. “And that describes very few places on Earth right now. Almost every place is currently in basically a state of disarray and uncertainty.”
Despite that “disarray and uncertainty,” SBF admitted he was not unmoved by the experience of testifying in Congress. “I think it always feels a little bit patriotic, I think that’s an appropriate word—I think maybe more so than younger me would have expected,” SBF told Decrypt.
And for all the disconnect that many crypto enthusiasts feel with the US government’s approach to crypto—especially after the infamous $1.2 trillion infrastructure package, which included language about taxing crypto brokers—SBF found testifying in Congress to be “really productive and reasonable. There were a lot of reasons not to expect that that was going to be the takeaway, but I think it was. There were a lot of representatives there, most of whose aim seemed to be to figure out what was going on in crypto, and ask questions which would help them get there,” he added.
Regulating crypto in the United States
The United States has been a hotbed for crypto-regulation takes, especially in the last 12 months.
When SEC chairman Gary Gensler assumed his post, many crypto folks assumed he’d be crypto friendly, mostly on account of his having taught one MIT course about blockchain tech. So far, that hasn’t been the case.
Since becoming SEC chair, Gensler has made a plethora of comments troubling to crypto investors, including that cryptocurrencies are not money, that they facilitate crime, and that many tokens look to him like unregistered securities. He has also echoed Senator Elizabeth Warren in calling for stronger crypto consumer protection laws.
Despite all of this, the crypto industry does have some friends in the government, including pro-Bitcoin Senator Cynthia Lummis (R-WY) who just last month proposed a new regulator be appointed to focus on the crypto industry.
gm from Decrypt: Sam Bankman-Fried with hosts Dan Roberts and Jeff Roberts. Decrypt will be offering each episode’s custom art as an NFT. (Illustration by Grant Kempster)
Will the United States miss the crypto boat?
Crypto has quickly become a controversial topic for lawmakers on Capitol Hill, many of whom sound unfriendly toward the industry, but SBF—who sees light at the end of the tunnel—thinks the U.S. could still evolve into a much warmer crypto jurisdiction.
“For the last four years, most of crypto has been going offshore because of the regulatory framework,” he said from his office in the Bahamas, adding that only 5% to 10% of global crypto trading volume is happening on U.S. exchanges these days.
Still, he said, “I’m cautiously optimistic—and I do want to emphasize the ‘cautiously’ there—that the movement might actually be in the opposite direction, that the movement might actually be onshore… I would not be shocked if massive progress was made on that in the next year or two, to the point where you might see a tripling of the fraction of liquidity and volume that was onshore. I think that’s probably our single biggest priority right now, is to see if we can help bring that about.”
Source: https://decrypt.co/90542/crypto-regulation-balanced-on-a-knifes-edge-sam-bankman-fried-ftx
