Vitalik Buterin Says Crypto Regulations Headed Toward ‘Anarcho-Tyranny’ – Here’s What He Means

Ethereum (ETH) creator Vitalik Buterin says that the crypto regulatory climate is turning into an “anarcho-tyranny” that is unfavorable for the industry.

In a post on the decentralized social network Warpcast, Buterin says that there is an unfair situation in crypto where founders who are transparent with their business models are targeted by regulators for allegedly being involved with the issuance of unregistered “securities.”

“The main challenge with crypto regulation (especially in the US) has always been this phenomenon where if you do something useless, or something where you’re asking people to give you money in exchange for vague references to potential returns at best, you are free and clear, but if you try to give your customers a clear story of where returns come 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 worse for the space than either plain anarchy or plain tyranny.

I would much rather see us move to the opposite situation, where issuing a token without giving a clear long-term story for why it will maintain or increase in economic value is the riskier thing, and if you do give such a long-term story and follow basic best practices, then you’re safe. Actually getting to this will require good-faith engagement, both from regulators and from industry.”

Buterin recently gave a substantial amount 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 30th.

Tornado Cash is an Ethereum-based coin mixing service that facilitates anonymous crypto transactions. In 2022, the US imposed a sanction on the platform claiming that it is used to launder illicit funds while posing a threat to national security.

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