The post Vitalik Buterin calls U.S. crypto regulatory approach ‘anarcho-tyranny’ appeared on BitcoinEthereumNews.com.

Vitalik Buterin, co-founder of Ethereum, has once again voiced his concerns regarding the state of cryptocurrency regulation, particularly in the US. In response to a user on Warpcast, a decentralized social media platform, Buterin highlighted a regulatory paradox that he believes is stifling the industry’s growth and integrity. Buterin observed that the current regulatory framework tends to permit projects with vague promises and ambiguous potential returns to operate with relative freedom. And counterproductively, projects that offer transparent information about returns and clearly define investor rights are often categorized as ‘securities,’ subjecting them to stringent regulations. In the US, the Securities and Exchange Commission (SEC), under chairman Gary Gensler’s leadership, has launched a series of lawsuits to classify cryptocurrencies as securities. In its latest effort, the SEC sued Consensys, alleging that its MetaMask wallet’s swapping and staking services violate securities laws. Many in the crypto industry have criticized the SEC’s ‘legislation through litigation’ approach. In April, the Blockchain Association and the Crypto Freedom Alliance of Texas accused the SEC of regulatory overreach in a lawsuit. The SEC’s stance on crypto, which Buterin describes as “anarcho-tyranny,” creates a perverse incentive structure that he argues is more damaging to the cryptocurrency space than either complete regulatory anarchy or strict regulatory tyranny. According to him, the SEC’s approach encourages the creation of ‘useless’ products and services. He wrote: “The incentive gradient that this “anarcho-tyranny” creates ends up worse for the space than either plain anarchy _or_ plain tyranny.” He called for a shift in the regulatory approach, advocating for a scenario where issuing a token without a clear, long-term value proposition is considered riskier. In contrast, projects that provide a transparent and credible long-term plan, and adhere to best practices, should be safeguarded. It could be argued that Buterin’s suggestion makes logical sense, and…

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Filed under: News - @ June 30, 2024 5:22 pm