Ethereum Co-Founder Blasts US Crypto Laws for Promoting “Useless Stuff”
Ethereum founder Vitalik Buterin ignited a firestorm this week with his scathing criticism of US crypto regulations, advocating for a major overhaul of the system. In a move that sent the industry into turmoil, Buterin criticized the broad definition of securities employed by the Securities and Exchange Commission (SEC), saying it stifles innovation and encourages empty promises of real progress.
Ethereum Co-Founder: Overly Broad Definitions Impede Development
Buterin’s main concern centers on the SEC’s classification of many crypto projects as securities. This label, according to Buterin, throws a wet blanket over real innovation. The current environment does not encourage proper innovation and real value within the cryptocurrency space, says Ethereum’s founder.
Vitalik criticized the US definition and regulation of cryptocurrency as securities, saying that the current system encourages frivolous things and unclear potential returns. If promised returns and rights are securities, you hope to see a shift to the opposite, issuing…
– Wu Blockchain (@WuBlockchain) June 30, 2024
He argues that the SEC’s approach prioritizes speculative ventures over projects with tangible economic benefits. What we see today is the rise of projects that focus on making vague promises of returns rather than real developments that can add value to the digital industry, Buterin said.
He lamented that:
“The incentive created by this “narcho-tyranny” ends up being worse in space than outright anarchy or outright tyranny.”
From Hype to Implementation: Redefining Securities for the New Era
Buterin is proposing a solution that could fundamentally change the way the SEC approaches crypto regulation. His vision hinges on a redefined classification of securities within the digital asset space.
Instead of just looking at the return promise, the cryptocurrency expert said that we should look at whether the tokens being issued are backed by some kind of economic activity. This change, according to Buterin, will encourage the creation of tokens with a real-world resource, separating real projects from speculative businesses built on hype.
Building a Future Where Innovation and Law Meet
The way forward, according to Buterin, requires a collaborative effort between regulators and the crypto industry. He envisions a future where regulators can implement safeguards against fraud while fostering an environment that allows innovation to flourish.
Ethereum’s enlightening call for change comes amid heightened global scrutiny on the crypto market. Regulatory bodies around the world are faced with the challenge of overseeing this new asset class.
His intervention serves as a timely reminder of the need to create balance – one that protects investors from bad actors while allowing the cryptocurrency industry to mature and harness its transformative potential. The crypto community is now awaiting the regulators’ response to Buterin’s proposals.
Featured image from Built In, chart from TradingView
