SBF’s Thoughts on Respecting OFAC’s Sanctions List ‘Triggers’ ShapeShift Co-founder
Earlier this week, the crypto billionaire riled the industry by suggesting ways to confront the legal and hacking woes plaguing the ecosystem.
Erik Voorhees, ShapeShift co-founder, is the latest one to detail concerns regarding the draft.
The OFAC Conundrum
While Voorhees noted that rules are important and that “voluntarily-adopted” standards are noble because they are achieved through coercion and violence, not consent and market forces, the same cannot be said for regulations. In a recent blog post, Voorhees shared his thoughts on SBF’s suggestions and said he does not believe in the concept of blacklists.
Developers should have the choice if they wish to subordinate their decentralized code to a blacklist. However, “forcing” them to do the same would mean tyranny and must be resisted by every participant in this industry, the exec argued.
SBF’s belief that everyone should respect OFAC’s sanctions list did not sit well with Voorhees. He explained that the Office of Foreign Assets Control disabling Americans from doing business with individuals “almost certainly guilty of heinous crimes” does not seem “necessarily unreasonable.”
Having said that, he pointed to OFAC’s list containing entire countries, which he argues to be absurd from an enforcement perspective, unethical, and “inexcusable for a nation that purports to be virtuous.”
“For Sam to suggest that the industry “should respect OFAC” is unbecoming. OFAC does not deserve respect. It deserves repeal. And anyone genuinely advocating for “an open, free economy” cannot support such blatant financial discrimination on millions of innocent people.”
DeFi and Other Suggestions
Voorhees found SBF’s suggestions regarding decentralized finance (DeFi) to be of most problematic. He lauded the FTX CEO’s comments on recognizing that decentralized code is speech and, as such, ought not to be regulated but is satisfied with the licensing part of things.
According to the SBF’s blog post, the requirement of license and registration emerges while hosting a website that provides a US retail front-end for decentralized protocols as well as marketing DeFi products to retail investors in the country.
Voorhees explained that this would mean a non-custodial Bitcoin wallet interface to spy on its users and report suspicious activities to FinCEN. He believes this would have “frightening” consequences.
Meanwhile, the famously libertarian founder stated that SBF’s proposal detailing ways to deal with hacks is reasonable. He also believes the best defense against hacks is the continued advocacy of self-custody and non-custodial exchange and wallet models. He positioned “self-custody” as a market solution and added that it will always be a cut above laws and mandates which try to protect “centralized honeypots.”
Featured Image Courtesy of FreightWaves
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I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.