Home » Ethereum Founder Vitalik Buterin: Crypto Industry Shouldn’t Be ‘Enthusiastically Pursuing Institutional Capital’

Ethereum Founder Vitalik Buterin: Crypto Industry Shouldn’t Be ‘Enthusiastically Pursuing Institutional Capital’

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ethereum Co-founder Vitalik Buterin highlighted the regulatory debate surrounding cryptocurrencies on Sunday, offering his thoughts on what should and should not be included in industry rules.

Regulation could make cryptocurrencies more acceptable to mainstream financial institutions and justify them as an asset class. But new rules and policies can also change the DNA of the industry, especially as it relates to principles like censorship resistance and decentralization.

Buterin said he believes maintaining the latter is a priority.

“I don’t think big institutional capital should be pursued full speed and zeal,” he said. “Regulations that make it difficult for crypto projects to reach the mainstream while allowing the crypto space to act freely inside are not much worse than regulations that undermine how crypto works inside.”

Buterin’s Twitter thread comes 10 days after a controversial blog post by Sam Bankman-Fried, founder and CEO of crypto exchange FTX. Outlining a vision for regulation for the industry.

Bankman-Fried has since surrendered to Crypto Twitter. get backlash about potential rules DeFi-related, such as requiring autonomous programs to comply with US sanctions and registering cryptocurrency websites as broker-dealers. He corrected the post and said he will continue to do so.

Regulatory uncertainty is seen as a barrier to institutional cryptocurrency investment, according to a new Fidelity Investments study. of Institutional investor digital asset survey We found that 16% of over 1,000 institutional investors say lack of regulatory clarity is a barrier to investing in digital assets.

Meanwhile, more than eight in ten institutional investors surveyed (81%) believe digital assets play a role in their investment portfolios. Additionally, 43% of his institutional investors said they would be interested in a Bitcoin ETF.

Since the Winklevoss brothers first applied for a Bitcoin ETF-like trust in 2013, the crypto industry segment has been chasing institutional capital for almost a decade.have limp Approval of spot-based Bitcoin ETFs.

According to Buterin, that’s not a bad thing.

“Actually, I’m kind of happy that a lot of ETFs are lagging behind,” he said. “We need time for the ecosystem to mature before we get more attention.”

Buterin has divided his envisioned policy goals for the crypto industry into two categories. It is about providing better protection to consumers navigating the emerging industry and stemming the illicit flow of cryptocurrencies.

To address the latter, Buterin is skeptical of requiring front-ends of DeFi protocols to adhere to Know Your Customer (KYC) standards. Such standards are used by financial institutions to prevent money laundering, fraud and corruption, but “hackers write custom code to interact with contracts” to bypass her usual KYC barriers.

“It frustrates users, but it does nothing for hackers,” he said.

There are DeFi regulations that Buterin thinks are more helpful, such as limiting the leverage users can trade, transparency in code audits, and requiring “knowledge-based testing” rather than “plutocratic net worth minimum rules.” ”

Buterin said he also supports creating regulations that would allow for more use. zero-knowledge proofthe principle of encryption to protect privacy.

response to response

SBF responds to Buterin’s point, saying it thinks it’s “pretty reasonable,” and willing to bring Ethereum co-founder to Washington, D.C. to provide nuanced information on regulation expressed that.

“I think policy makers/regulators will find it very interesting to hear from them. @VitalikButerin,” SBF said. “He very Unlike your average DC guy, he says his thoughts calmly and thoughtfully in a slightly fresh way.

Buterin’s comments also appear to have support from Changpong Zhao, the founder and CEO of another major cryptocurrency exchange, Binance. The CEO responded to the thread with his thumbs up emoji.

Crypto investor Ryan Sean Adams also agreed with Buterin’s participation in the debate, saying Buterin welcomed sharing his thoughts on the DAO and crypto media project Bankless.

Delivered by Adams sharp criticism In SBF’s first blog post, he tweeted, “This is the absolute worst.”

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