Regulation
Vitalik Buterin Shares Important Opinion on Flaws in Cryptocurrency Regulation in the US
Co-founder of Ethereum (ETH). Vitalik Buterin expressed strong criticism of the current US regulatory framework on cryptocurrencies. He claims he unfairly targets cryptocurrencies as securities, while allowing “useless things” with “vague potential” to operate unchecked.
Vitalik Buterin criticizes the US regulatory model for cryptocurrencies
Buterin’s remarks came in response to questions about regulation in the broader cryptocurrency industry on the Ethereum network that were posed to him. The investigation also borders on the question of whether more needs to be done to reduce the number of opportunists, thus making the sector safer.
According to Vitalik Buterin, the main problem with cryptocurrency regulation in the United States is that the system favors assets with unclear promises of potential returns over those with transparent and well-defined financial expectations.
In particular, he argues that if a project presents vague potential returns without concrete plans, it often escapes regulatory scrutiny. However, projects that provide clear explanations of expected returns and client rights are more likely to be classified as securities and to be subject to stricter regulation.
Buterin described this regulatory inconsistency as “anarcho-tyranny.” He suggested creating an incentive structure that is unfavorable to the crypto space, rather than complete anarchy or rigid tyranny. He argued that this framework impedes innovation and transparency within the industry.
The Ethereum co-founder expressed his desire for a change in regulatory approach that encourages transparency and long-term value in token issuance. He favors a system in which issuing tokens without a clear long-term plan to maintain or increase their economic value is considered riskier than providing such a plan.
A call for regulatory reform
According to him, real cooperation and good faith commitment between regulators and the cryptocurrency industry is needed to bring about such a change.
Buterin said: “I would much rather see us move to the opposite situation, where issuing a token _without_ providing a clear long-term story as to why it will maintain or increase its economic value is the riskiest thing, and if you _provide_ such a long-term story long term and follow basic best practices, then you are safe.”
Crypto industry analysts agree that Buterin’s comments highlight the need for more balanced regulatory approachThis move could reward transparency and long-term planning in the cryptocurrency ecosystem, and the regulator should do more to encourage innovation.
The approval of Spot Ethereum ETFs is a good place to start. The SEC’s reversal means the bar is shifting in favor of cryptocurrencies, a trend that is setting a precedent for other assets.
To know more: Bitcoin (BTC): Will history repeat itself in July?