Vitalik Buterin spoke about the problems of regulating the cryptocurrency sector
Date: 2024-07-01 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Ethereum co-founder Vitalik Buterin shared his opinion on the current problems of regulation of the cryptocurrency sector, especially in the United States. In his opinion, authorities often take a selective approach, which leads to the fact that opaque and profit-maximizing projects are favored compared to well-thought-out and carefully organized ones.
Buterin expressed his concerns in response to a post by a member of the Ethereum Foundation under the pseudonym Jason on the Warpcast platform. Jason recalled the statement of the co-founder of Ethereum on site X (formerly Twitter) from October 2022. At the time, Buterin was actively commenting on the debate between former FTX CEO Sam Bankman-Fried (SBF) and ShapeShift CEO Erik Voorhees on the Bankless podcast.
Regulation proposals
Following the debate, the SBF proposed “voluntary standards” that it believed could simplify regulation of the industry, including oversight of front-end developers for accessing DeFi projects. In response to this, Buterin proposed his own "rules", which included:
- Leverage restrictions.
- Audit report on the source code of the smart contract and the project as a whole.
- Higher entry threshold instead of minimum capital requirements.
Key regulatory issues
Buterin noted that the main problem with regulating the industry is a selective approach. Projects with minimal value operate freely on the market, while more thoughtful and carefully organized projects face sanctions. As an example, he cited a lawsuit by the US Securities and Exchange Commission (SEC) against Consensys, the developer of the MetaMask crypto wallet.
Buterin emphasized that issuing a token without a clear rationale and explanation for its future economic value should be a riskier venture. He noted that following certain basic rules could allow projects to avoid regulatory scrutiny. This requires good faith engagement from both regulators and market participants.
Criticism of memcoins
Previously, Vitalik Buterin criticized memcoins, saying that some of them have no value for the ecosystem. He stressed that projects that do not have significant value should not receive regulatory support.
Vitalik Buterin also attended the Incrypted Conference 2024, where he gave an exclusive interview to our editorial team, sharing his thoughts on the future of the cryptocurrency industry and the importance of balanced regulation.
