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1) As promised: My current thoughts on crypto regulation.

Possible Digital Asset Industry Standards

Draft of a set of standards that we as an industry could enact to create clarity and protect customers while waiting for full federal regulatory regimes

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and

Additionally, blocklist transitivity is easily exploitable. You get pretty handwavey about how people could "send back" illicit funds to clear their name. Who's gonna pay for all those transfers?

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and

Also, even if protocols COULD do the transitivity check on-chain, that makes them extremely vulnerable to exploits because hackers could sprinkle key protocols or addresses with illicit funds to make them unusable for key periods in time, potentially causing major issues

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note the section where I talk about how an address *shouldn't* be tainted just from receiving funds, because of exactly that worry

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Ok well if it isn't tainted what's the point of the blocklist?

SBF

@SBF_FTX

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@teddywoodward

a) x has 15 tokens, y has 20 tokens, x is blocklisted b) x sends 5 to y c) y can still send 20 out--it had 20 legit ones--just can't send the last 5 without being tainted d) y can also burn 5 to 'cure' itself

11:27 PM · Oct 19, 2022Twitter Web App

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