FTX Founder's View on Regulatory Environment: Liquidity, Trading Volume to Return from Offshore Exchanges to the US, Reveals Top Three Favorite Assets

Sam Bankman-Fried, the founder of FTX exchange, shared his views on the current regulatory situation in the United States in the latest episode of the Decrypt Podcast. Despite the current challenging regulatory environment for cryptocurrencies, he remains optimistic about the future, believing that the light at the end of the tunnel is already visible. Additionally, he also revealed the three most promising blockchain projects aside from BTC and ETH.

Key points mentioned by SBF in the podcast:

1. Regulatory Progress at FTX: SBF pointed out that the highlight of FTX's performance in 2021 was not the significant growth in user base or the naming rights at U.S. sports venues or endorsements by sports stars, but the progress made in the regulatory field.

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2. Bahamas as a Country with a Well-Defined Regulatory Framework: Since relocating from Hong Kong to the Bahamas in September last year to seek a more favorable regulatory environment, SBF claimed that the Bahamas is almost a rare clean slate on Earth, with regulatory chaos and uncertainty prevailing in the crypto field worldwide.

3. Productive Crypto Hearing: On 12/8, several industry experts attended a crypto hearing at the U.S. House of Representatives. Despite previous hasty decisions on the infrastructure bill that left crypto investors dismayed, SBF believes that the hearing was productive and reasonable, with many lawmakers attempting to clarify the current state of the crypto industry and raise issues that would help in establishing a regulatory framework.

Welcoming Regulatory Dawn

Since SEC's new chairman Gary Gensler took office, given his experience teaching blockchain at MIT, the community is mostly optimistic about his friendly regulation towards the crypto industry. However, apart from approving Bitcoin futures ETFs, his messages regarding the crypto field have mostly been seen as threats, especially concerning crypto assets being classified as securities.

However, SBF believes the worst moments have passed, and he has seen the dawn at the end of the tunnel, that the U.S. might ultimately evolve into a more crypto-friendly jurisdiction. He claims that due to regulatory factors, only 5-10% of global cryptocurrency trading volume in the past four years has been on U.S. exchanges, but this situation may soon reverse:

I am cautiously optimistic. Trading volume may be returning from offshore exchanges. If the situation becomes more significant in the next year or two, I wouldn't be surprised. You might see three times the liquidity and volume on U.S. exchanges. I think this should be our top priority right now, and we will try to make that happen.

Promising Blockchain Projects

1. Solana: Solana's impressive growth in 2021 is undeniable, but it has recently faced scrutiny due to market corrections and multiple shutdown issues. SBF believes Solana has the scalability needed for widespread adoption and is one of the few public chains with a reasonable plan for the future.

2. Avalanche: SBF mentioned that the Avalanche team has put in a lot of work, but its scalability falls short of his expectations, ranking it second. However, he also acknowledges that blindly pursuing scalability may not always be correct and that the Avalanche team's priorities might be right. He believes Avalanche will become stronger over time.

3. Wrappers: Such as Wrapped Bitcoin WBTC and other assets. Due to the differences between chains, SBF believes that Wrapped assets are a growing trend for the future.