In the words of Sam Bankman-Fried, “Ideally, we’d end up in a place as an industry where being a security is not a bad thing: where there are clear processes for registering digital asset securities which protect customers while allowing for innovation.“
Sam Bankman-Fried, the CEO of FTX, said his exchange will stop supporting certain tokens in the US to avoid facing regulatory issues.
The CEO of FTX recently proposed a set of industry regulation standards on the FTX Policy website. As per the draft document, FTX will classify tokens as securities while awaiting the “full establishment of regulatory regimes.”
Sam added that the exchange’s legal team will conduct Howey Tests on crypto tokens. If the tests reveal that the asset has the traits of a security, FTX will treat it as such.
The team will label the non-security tokens as commodities unless they were previously flagged by the SEC. FTX will not list any assets that turn out to be potential securities “unless/until there is a process for properly registering [them].”
“In general, BTC and ETH are not considered securities; many long-tail tokens acting as investment contracts are securities. There are a number which are unclear, however.”
Sam Bankman claimed that suspending transfers and freezing crypto assets by creating blocklists is an effective method for dealing with blockchain-related crimes.
He also suggested a 5-5 standard for dealing with security breaches and exploits.
According to the standard, a platform’s priority should be to protect its customers in case of a hack. Then, assuming the hackers act in good faith and agree to return the assets to the platform, they should be allowed to keep 5% of the stolen funds.
Meanwhile, Texas authorities have decided to probe FTX and Sam Bankman over violation of the Securities Law.
