Vitalik Buterin criticizes US regulations on cryptocurrencies, calls for serious reforms

Ethereum co-founder Vitalik Buterin has criticized the United States for its approach to defining and regulating cryptocurrencies as securities. Cryptocurrency journalist Colin Wu shared the information in a W Blockchain X post, noting that Buterin is concerned about the current regulatory environment.

Buterin’s criticism is directed at the U.S. Securities and Exchange Commission (SEC) and its broad definition of what is considered a security in the digital sphere. He noted that the regulatory environment promotes the development of practically useless projects and various empty promises of possible profits. As Buterin stated, the existing environment does almost nothing to encourage proper innovation and real value in the cryptocurrency sphere.

Buterin’s main concern with the SEC’s approach is that it leads to projects that are not very clear about the benefits they provide, and that only make speculative promises, not real changes that could be beneficial to the digital industry. He noted that a change in the law is necessary for the promise of returns and rights to qualify as a security. This change should go in the direction of the issuance of tokens being backed by some form of economic activity.

Vitalik Buterin calls for fair regulation of cryptocurrencies

Buterin calls on regulators and the industry to work honestly together to make this happen. He estimates that the regulatory environment could be made slightly less onerous, while still allowing for a crackdown on fraud that is unlikely to be of much use. Therefore, in his opinion, it is high time to make such a change for the further development of the cryptocurrency market.

Buterin made the remarks during a week in which the cryptocurrency market is already under enormous pressure from regulators around the world. Given that the digital asset market is still relatively new, governments and other regulators are still searching for the most appropriate ways to govern it.

The cryptocurrency community will wait for regulators to respond to Buterin’s suggestions for adopting the changes. Nevertheless, his words cannot help but contribute to the ongoing discussion about the further development of cryptocurrency regulation in the United States and around the world.