Crypto blacklists, to help the economically disadvantaged (?)
How's this for an exciting take on a boring subject:
Yesterday, FTX CEO, Sam Bankman-Fried (SBF) broke down his ideal regulatory framework for the crypto industry.
The key idea: instead of whitelisting people to trade, he's a bigger fan of having a rock solid blacklist.
Sam argues that whitelists (aka 'allowlists') would be a massive burden on innovation and commerce, and “freezes out the economically disadvantaged.”
(Not to mention the upfront effort required to verify each wallet).
On the other hand, simply allowing all transfers between anyone and everyone would open the floodgates to financial crime.
The proposal of blacklists - lists of banned wallets - strikes a healthier balance.
Though there are a few in holes Ol' Sammy's framework; like what happens when illicit funds get transferred into a good Samaritan's wallet (which happened during the Tornado Cash sanctions)?
And how does someone get off the blacklist once they've been put on there?
SBF has some suggestions, like OFAC creating an address specifically for any victims to send their illegal funds to, thus “curing” their address from blacklist status.
It's an interesting idea, and SBF is damn smart, so we don't doubt this could be an effective framework.
The more frameworks discussed and weighed, the better the chances of having a solid final solution.
As SBF says: regulation is inevitable, but the right approach will make a world of difference.
