Sam Bankman-Fried, Erik Voorhees and the battle for crypto’s soul

October 21, 2022, 3:32 PM UTC
Sam Bankman-Fried in Hong Kong on July 16, 2021.
Anthony Kwan for Fortune

Two of crypto’s most influential thinkers are sparring on social media over how to respond to a growing regulatory storm hanging over the industry. The debate pitted Erik Voorhees, the famously libertarian founder of token service ShapeShift, against FTX’s Sam Bankman-Fried, who riled the crypto world with a Wednesday blog post that suggested ways to confront the industry’s legal and hacking woes.

SBF has emerged this year as the most powerful man in crypto, and has flexed his influence both in Washington, D.C., and in the market where he has been snapping up weaker competitors. His blog post is not particularly radical, and some of his proposals went over well—like trying to restrict hackers’ bounties to 5% when they plunder a project. But SBF’s call for restrictions on who should access DeFi platforms, and for cooperating with the Treasury Department’s powerful sanctions agency known as OFAC, caused an uproar.

In a rebuttal, Voorhees declared that for crypto to submit to OFAC’s authority is to embrace tyranny, and he decried the agency’s practice of sanctioning the populations of entire countries—why, he asks, should people be restricted from sending financial help to the brave women of Iran? More fundamentally, he fears that imposing the permissions of platforms like Uniswap—designed to operate as autonomous code—is a deep affront to the ethos of crypto, which is about building tools to let people use money that’s beyond the control of banks and governments.

Voorhees and SBF then took the debate to Twitter, where the latter said he does not endorse the OFAC regime but is simply acknowledging the realities of the law as it stands. Needless to say, the pair did not come to an agreement, but their exchange is refreshing both for the sophistication of their ideas and for its high level of civility—a refreshing break from the smears and dunking that too often define Crypto Twitter.

On one level, the SBF-Voorhees debate shows how the crypto industry is struggling how to find a balance between ideals and pragmatism at a time when the government is breathing down its neck. But at another level, it reflects a generational battle in crypto: Voorhees came up in the early days of Bitcoin and embodies the radical libertarianism of the first crypto builders. SBF, meanwhile, arrived on the scene nearly a decade later and is viewing the industry through the lens of big finance. Going forward, it will be fascinating to see whose set of ideas prevail—and if crypto has room for both.

Jeff John Roberts


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