Vitalik Buterin called the US cryptocurrency regulatory approach "anarchy"

Ethereum co-founder Vitalik Buterin has once again expressed his concerns about the current state of cryptocurrency regulation, especially in the United States.

When interacting with users on the decentralized social media platform Warpcast, Vitalik Buterin put forward a key argument. He believes that the current regulatory system contains a paradox that is actually harming the rise and overall health of the cryptocurrency industry. However, this contradictory regulatory attitude not only limits the industry’s potential for development, but may also undermine market transparency and fairness.

The Current Situation and Paradox of Regulation

Meanwhile, Vitalik Buterin’s observation pointed out a key issue with the current regulatory framework for cryptocurrencies: it seems to be more inclined towards laissez-faire for projects that offer unclear promises and potential returns, while imposing stricter regulation on projects that have higher transparency, can provide clear return information and define investor rights. However, this regulatory approach may lead to market imbalance as projects that may be more beneficial for innovation and industry development instead face more obstacles and restrictions.

In the United States, the Securities and Exchange Commission (SEC), led by Gary Gensler, has initiated multiple legal actions asserting that cryptocurrencies should be treated as securities and regulated. Under the leadership of Chairman Gary Gensler, the SEC has launched a series of lawsuits seeking to classify cryptocurrencies as securities. In its most recent action, the SEC filed a lawsuit against Consensys, alleging that the exchange and staking services provided by its subsidiary, MetaMask Wallet, violated securities regulations.

Many participants in the cryptocurrency industry have expressed opposition to the SEC’s use of litigation to establish regulatory rules. They believe that this approach is too coercive and may stifle innovation and freedom in the industry. In particular, in April 2024, the Blockchain Association and the Crypto Freedom Alliance in Texas filed a lawsuit against the SEC in court, arguing that the SEC’s regulatory measures are too strict and exceed the necessary scope.

Vitalik Buterin criticized the Securities and Exchange Commission (SEC) of the United States for its regulatory attitude towards the cryptocurrency industry, describing it as a form of “anarchist dictatorship.” He believes that this approach by the SEC has led to a distorted incentive mechanism, which may be more harmful to the cryptocurrency industry than either no regulation at all or overly strict regulation. He stated that this regulatory paradox may lead to the emergence of products and services in the market that lack value or innovation, thereby affecting the overall health of the industry.

Buterin pointed out in his argument:

The incentive gradient created by this ‘anarchic tyranny’ will ultimately bring about consequences worse than pure anarchy or pure tyranny to this space.

Call for a clearly defined regulatory framework

Therefore, Buterin called for reforms in regulatory policies and emphasized that token issuances lacking clear long-term value propositions should be classified as high-risk projects. In contrast, projects that can provide clear, credible long-term development plans and adhere to industry best practices should receive more support and protection. Such suggestions are not only reasonable but also contribute to creating a favorable environment for the development of truly innovative products.

Buterin said that achieving this regulatory balance requires sincere and open cooperation between regulatory agencies and the cryptocurrency industry. He pointed out that only through joint efforts and dialogue can a regulatory system be built that promotes innovation and ensures investor rights. This collaboration is crucial for the healthy development of the cryptocurrency industry.

Buterin has always advocated for the clarity and fairness of regulation, believing that the current regulatory system not only limits the industry’s innovation potential, but may also foster dishonest behavior. On several occasions, he has proposed the need to establish a regulatory environment that can support projects with substantial value and ensure that investors are not subject to fraud. Such regulatory environment is crucial for maintaining market integrity and promoting positive industry development.

His latest viewpoint further reinforces his position, emphasizing the need for frank and sincere communication between regulatory authorities and participants in the cryptocurrency industry. He believes that through the joint efforts of both parties, a regulatory framework can be established that will enhance industry transparency, strengthen accountability, and promote long-term stable growth of the cryptocurrency industry. This cooperation is crucial for promoting the healthy development of the cryptocurrency industry.

In summary, Buterin advocates a balanced regulatory strategy, emphasizing that regulation should be meticulous and aimed at both stimulating industry innovation and safeguarding investors’ legitimate rights and interests. His views provide important guidance and inspiration in the ongoing discussions on the future of cryptocurrency regulation.

Conclusion:

Vitalik Buterin’s views and arguments on the US cryptocurrency regulatory system highlight the necessity for urgent rethinking of current regulatory strategies. The balanced and cautious regulatory approach he advocates not only reflects a profound insight into the potential of the cryptocurrency industry and the risks that excessive regulation may bring, but also challenges the existing system and provides a vision for the future development of the cryptocurrency industry.

Meanwhile, Buterin called for the establishment of a regulatory environment that can both stimulate innovation and protect investors, which is not only a challenge to the existing regulatory framework, but also a vision for a future cryptocurrency ecosystem full of integrity and transparency. However, it is through such forward-looking guidance and collaborative efforts both inside and outside the industry that the way can be paved for a strong and responsible cryptocurrency ecosystem.