Conversation

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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RYAN SΞAN ADAMS - rsa.eth

@RyanSAdams

Oct 19

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@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.

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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.

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fiskantes in his true form

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"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

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Please tell me what set of regs you’d argue for?

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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

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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

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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'

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there do, I think, exist carveouts for devs and validators in the bill draft you posted?

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Those carve outs, if they were to even be adopted, are drafted very narrowly so, in practice, they would have little positive impact.

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how exactly would it make things *worse* that the status quo?

11:28 PM · Oct 19, 2022Twitter Web App

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It gives CFTC power to regulate spot digital commodity markets— a power it never had. DeFi projects would be classified as “digital commodity platforms” and DEXs would be “trading facilities”. We should focus our efforts on a non permissioned notice and disclosure regime.

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note that this is not fully true -- see eg cftc.gov/PressRoom/Pres -- CFTC's power expands a bit beyond derivatives already

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