Vitalik Buterin, one of the co-founders of Ethereum, has recently shared his frustration with the current state of cryptocurrency regulation and proposed a solution to address the issue. He expressed these views in response to a user on Warpcast, a social media platform based on the Farcaster protocol.
Buterin highlighted the challenges faced by cryptocurrency developers due to existing regulatory efforts, which have put them in a difficult position. He pointed out that the prevalence of bad actors, scammers, and misleading information on social media and sharing platforms has created an environment of anarchy in the cryptocurrency space.
In the past, Buterin had suggested three recommendations to tackle the problem of “useless” cryptocurrency products and services. These included implementing limits on leverage, mandating audits and transparency, and introducing knowledge tests as a requirement for usage.
While the practicality of implementing cryptocurrency knowledge tests at a regulatory or organizational level remains uncertain, Buterin emphasized the importance of setting policy limits on cryptocurrency project leverage and enforcing auditing and transparency reporting standards.
Furthermore, Buterin expressed concern about the United States’ approach to cryptocurrency regulation, which he described as vague and inconsistent. He advocated for a shift towards a regulatory framework that prioritizes companies and projects with a clear long-term vision and plan, making it riskier to issue tokens without a compelling economic value proposition.
In addition to regulatory reforms, Buterin also emphasized the need for regulations that support and benefit the cryptocurrency industry. He endorsed TiTok AI for onchain image storage as a potential solution in this regard.