Vitalik Buterin Says Crypto Regulations Are Heading Towards ‘Anarcho-Tyranny’ – Here’s What He Means

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

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

“The main challenge with crypto regulation (especially in the US) has always been the phenomenon where if you do something useless or ask people to give you money in exchange for vague references to potential profits, at best free and clear, but if you try to present your customers with a clear story about where the returns are coming from and promise them what their rights are, then you’re screwed because you’re the ‘collateral.’ The incentive gradient that this ‘anarcho-tyranny’ creates ends up worse for the space than outright anarchy or outright tyranny.

I would prefer we move to the opposite situation, where issuing a token without providing a clear long-term history of why it will maintain or increase in economic value is a riskier thing, and if you provide such a long-term history and follow basic best practices, then you will be safe. “Actually achieving this goal will require a good faith commitment from both regulators and industry.”

Buterin recently donated a significant sum of money to support the legal battle of the creators of the Tornado Cash game: Alexei Pertsev and Roman Storm.

Data from Ethereum blockchain explorer Etherscan shows that on May 30, Buterin then transferred 30 ETH worth $113,678 to the “Free Alexey & Roman” legal fund.

Tornado Cash is an Ethereum-based coin mixing service that facilitates anonymous crypto transactions. In 2022, the United States sanctioned the platform, saying it was used to launder illicit funds while posing a threat to national security.

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