Vitalik Buterin, Co-Founder of Ethereum, Criticizes Current Cryptocurrency Regulation
Current Crypto Regulation Leads to Chaos
Vitalik Buterin, co-founder of Ethereum, recently expressed his dissatisfaction with the current state of cryptocurrency regulation. He argues that the current situation creates both “anarchy” and “tyranny” in the sector, which he believes is more damaging than a clear choice of either.
Buterin described how current regulatory efforts are putting developers in the crypto space in a difficult position. He explained that if you do something useless or ask people for money in exchange for vague references to potential returns, you’re in the clear. But if you try to give your customers a clear story about where the returns are coming from and make promises about their rights, then you’re screwed for being a “security.” This situation, which Buterin describes as “anarcho-tyranny,” is ultimately extremely damaging to the entire industry.
Buterin has previously made recommendations to address the problem of “useless” cryptocurrency products and services. He proposes limiting leverage, requiring auditing and transparency, and giving users access based on knowledge testing. While it is unclear how such knowledge testing could be implemented at a regulatory level, limits on leverage and requirements for auditing and transparency could be feasible policy measures.
Unfair Advantages of Crypto Industry
Buterin further criticizes the uneven approach to crypto regulation, especially in the US, where there are many users but regulations are often vague and uneven. He states that regulations currently protect companies and projects without a long-term vision or plan. He would prefer to see issuing a token without a clear long-term story, like the abundance of memecoins, made riskier. He adds that achieving this goal will require good intentions, both from regulators and the industry.
Buterin is therefore clearly calling for a reform of cryptocurrency regulations. With his recommendations, he hopes to contribute to a more stable and reliable crypto market, in which useful innovations can flourish without being undermined by a combination of anarchy and tyranny.
