Regulation
Vitalik Buterin Calls US Regulatory Approach to Cryptocurrencies ‘Anarcho-Tyranny’
Vitalik Buterinco-founder of Ethereumhas once again expressed concerns about the state of cryptocurrency regulation, particularly in the United States. answer To a user of Warpcast, a decentralized social media platform, Buterin pointed out a regulatory paradox that he said is holding back the industry’s growth and integrity.
Buterin observed that the current regulatory framework tends to allow projects with vague promises and ambiguous potential returns to operate with relative freedom. Counterproductively, projects that offer transparent information about returns and clearly define investor rights are often classified as “securities,” subjecting them to strict regulations.
In the United States, the Securities and Exchange Commission (SEC), under the chairmanship of Gary Gensler leadership, launched a series of lawsuits to classify cryptocurrencies as securities. In its latest attempt, the SEC sued Consensys, alleging that its MetaMask wallet’s exchange and staking services violate securities laws.
Many in the cryptocurrency industry have criticized the SEC’s approach of legislating through litigation. In April, the Blockchain Association and the Crypto Freedom Alliance of Texas accused SEC sues for regulatory overreach in lawsuit.
The SEC’s stance on cryptocurrencies, which Buterin describes as “anarcho-tyranny,” creates a perverse incentive structure that he believes is more damaging to the cryptocurrency industry than complete regulatory anarchy or strict regulatory tyranny. The SEC’s approach, he says, encourages the creation of “useless” products and services.
He wrote:
“The incentive gradient that this ‘anarcho-tyranny’ creates ends up being worse for space than simple anarchy or simple tyranny.”
He called for a change in regulatory approach, advocating a scenario in which 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 protected. One could argue that Buterin’s suggestion makes sense and would create an environment conducive to the innovation of genuinely valuable products.
Achieving this balance, Buterin said, would require serious collaboration between regulators and the crypto industry.
Buterin has consistently stressed the importance of clear and fair regulation. He has often argued that the current regulatory landscape stifles innovation and encourages dishonesty. In his previous statements, he has called for a regulatory environment that supports genuine projects while protecting investors from fraudulent schemes.
His latest comments reinforce this position, urging regulators and industry players to engage in good faith dialogue. Buterin believes that by working together, they can develop a regulatory framework that promotes transparency, accountability, and sustainable growth in the cryptocurrency sector.
Buterin’s advocacy for balanced regulation underscores the need for a nuanced approach that can foster innovation while ensuring investor protection. His ideas continue to be a guiding voice in the ongoing debate over the future of cryptocurrency regulation.