Regulation
Vitalik Buterin Says Cryptocurrency Regulation Leads to “Anarcho-Tyranny” – Here’s What He Means
Ethereum (ETH) Cryptocurrency creator Vitalik Buterin says the regulatory climate for cryptocurrencies is turning into an “anarcho-tyranny” that is unfavorable to the industry.
In a post on the decentralized social network Warpcast, Buterin said that there is an unfair situation in the cryptocurrency industry where founders who are transparent with their business models are being targeted by regulators for allegedly participating in the issuance of unregistered “securities.”
“The main challenge with regulating cryptocurrencies (especially in the US) has always been this phenomenon that if you do something useless, or something where you ask people to give you money in exchange for vague references to potential returns at best, you’re free and clear, but if you try to give your customers a clear story of where the returns are coming from and promises about what rights they have, then you’re screwed because you’re “a security.” The incentive gradient that this “anarcho-tyranny” creates ends up being worse for the space than outright anarchy or outright tyranny.
“I would much prefer that we move to the opposite situation, where issuing a token without providing a clear long-term explanation of why its economic value will be maintained or increased is the riskiest thing to do, and if you provide such a long-term explanation and follow basic best practices, then you are safe. To get there will require a good faith commitment, both from regulators and from the industry.”
Buterin recently gave a substantial sum of money to support the legal battle of Tornado Cash developers Alexey Pertsev and Roman Storm.
Data from Ethereum blockchain explorer Etherscan shows that Buterin transferred 30 ETH worth $113,678 at the time to the “Free Alexey & Roman” legal fund on May 30.
Tornado Cash is an Ethereum-based cryptocurrency mixing service that facilitates anonymous crypto transactions. In 2022, the United States imposed a sanction on the platform, claiming it was being used to launder illicit funds while posing a threat to national security.
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Featured image: Shutterstock/balabolka/IfH