Ethereum Co-Founder Vitalik Buterin Decries State of Crypto Regulations as ‘Anarcho-Tyranny’

cryptonews.com:

Ethereum co-founder Vitalik Buterin has voiced his frustration regarding the current state of cryptocurrency regulations and proposed a potential solution to address the issue.

Buterin’s remarks came in response to a user on Warpcast, a social media platform built on the Farcaster protocol, where he highlighted the challenges faced by cryptocurrency developers due to existing regulatory efforts.

Buterin pointed out a perplexing phenomenon in crypto regulation, particularly in the United States, where projects that offer vague references to potential returns or engage in activities devoid of utility can operate without repercussions.

However, when developers attempt to provide clear explanations of returns or promise certain rights to their customers, they are often penalized for being categorized as securities.

Buterin referred to this situation as “anarcho-tyranny,” emphasizing that this gradient of incentives is more detrimental to the industry than anarchy or tyranny alone.

The prevalence of bad actors, scammers, and baseless hypesters on social media and sharing platforms contributes to the anarchic side of the industry.

To combat this, Buterin previously proposed three recommendations aimed at addressing the problem of “useless” cryptocurrency products and services.

These suggestions include limiting leverage, implementing audits and transparency measures, and introducing knowledge tests to regulate usage.

The practical implementation of cryptocurrency knowledge tests at a regulatory level or in individual and corporate settings remains uncertain.

However, it is likely that policy measures will be necessary to impose limitations on leverage within cryptocurrency projects and establish requirements for auditing and