Vitalik Buterin shares big comments about the gaps in cryptocurrency regulation in the US

Co-founder of Ethereum (ETH) Vitalik Buterin has issued a strong critique of the current US regulatory framework for cryptocurrencies. He argues that it unfairly targets cryptocurrencies as securities while allowing “useless things” with “unclear potential” to operate unchecked.

Vitalik Buterin criticizes the American model of cryptocurrency regulation

Buterin’s statements were in response to questions he was asked about regulation of the broader crypto industry on the Ethereum network. The study also borders on whether more is needed to reduce the number of opportunists, thereby making the industry safer.

According to Vitalik Buterin, the main problem with cryptocurrency regulation in the United States is that the system favors assets with unclear promises of potential returns over assets with clear and well-defined financial expectations.

In particular, he argues that if a project presents vague potential returns without concrete plans, it often escapes regulatory scrutiny. However, projects those that offer clear explanations of expected returns and customer rights are more likely to be classified as securities and be subject to more stringent regulation.

Buterin referred to this regulatory inconsistency as “anarchotyranny.” He suggested that this creates an incentive structure that is unfavorable to the crypto space, rather than total anarchy or strict tyranny. He maintains that this framework prevents innovation and transparency in the industry.

The Ethereum co-founder has expressed a desire to change the regulatory approach that encourages transparency and long-term value in token issuance. He advocates for a system where issuing tokens without a clear, long-term plan to maintain or grow their economic value is considered riskier than providing such a plan.

A Call for Regulatory Reform

According to his argument, sincere cooperation and fair action between regulators and the cryptocurrency industry are necessary to implement such a change.

Buterin stated: “I would prefer that 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 _do_ issue such a long-term history and follow the basic best practices, then you will be safe.”

Cryptocurrency industry analysts agree that Buterin’s comments underscore the need for more balanced regulatory approachThe move could reward transparency and long-term planning in the cryptocurrency ecosystem, and the regulator should do more to encourage innovation.

Approval spot Ethereum ETF is a good place to start. The SEC’s turnaround means the bar is shifting in favor of cryptocurrencies, a trend that is setting precedence for other assets.

Read more: Bitcoin (BTC): Will history repeat itself in July?