Ethereum co-founder Vitalik Buterin has once again expressed his concerns about cryptocurrency regulation, especially in the United States. In response to a user on Warpcast, a decentralized social media platform, Buterin highlighted the regulatory paradox that, in his view, stifles the growth and integrity of the industry. He pointed out that the current regulatory framework in the US tends to allow projects with unclear prospects and ambiguous potential returns to operate relatively freely. Conversely, projects that offer transparent information about returns and clearly define investor rights are often classified as “securities” and subjected to strict regulations.
Under the leadership of Gary Gensler, the SEC has initiated several lawsuits to classify cryptocurrencies as securities. The commission’s latest initiative includes a lawsuit against Consensys, alleging that the exchange and staking services of the MetaMask wallet violate securities laws.
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Buterin described the Securities and Exchange Commission’s stance on cryptocurrencies as “anarchic tyranny,” creating a structure with perverse incentives that, according to him, does more harm to the crypto space than help. He believes this approach encourages the creation of “useless” products and services.
Buterin advocated for regulatory change where issuing tokens without a clear, long-term value proposition is considered riskier. In contrast, projects that provide a transparent and reliable long-term plan and adhere to best practices should be protected. This approach would encourage innovation of valuable products.
Achieving this balance, according to Buterin, requires serious collaboration between regulators and the crypto industry. He consistently emphasized the importance of clear and fair provisions, arguing that the current landscape hinders innovation and encourages fraud.
