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Vitalik Buterin reveals the main challenge of cryptocurrency regulation
Gamza Khanzadaev
Vitalik Buterin criticizes cryptocurrency regulation, highlighting disparities where meme coins like Dogecoin thrive while projects like XRP face stricter scrutiny
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Vitalik Buterin, the founder of Ethereum, came to Farcaster to highlight a major issue in the cryptocurrency regulatory landscape, particularly in the United States. He pointed out that projects that promise unclear returns often operate freely, while those with clear value propositions face strict regulation. This situation creates a counterproductive environment for the industry, according to Buterin.
Noting the problematic incentive gap created by this regulatory approach, he suggested that it is harmful to the crypto space as a whole. He believes that the current system, which can be described as “anarcho-tyranny”, is worse than complete regulatory anarchy or strict regulatory tyranny.
A key aspect of this perspective is the contrasting treatment of different cryptocurrencies. For example, meme coins like Dogecoinwhich often lack a clear value proposition, appear to navigate the regulatory environment more easily. In contrast, more established projects like Ethereum, Cardano It is XRPthat offer detailed plans and promises to their users often face regulatory hurdles.
Source: Farcaster
Good faith
Buterin advocates a change in regulatory practices. He suggests that issuing tokens without a clear long-term value proposition should be considered riskier. On the other hand, projects that offer transparent value stories and adhere to best practices should be considered safer and face fewer regulatory challenges.
To achieve this change, Ethereum founder calls for good-faith engagement between regulators and the crypto industry. He believes such collaboration is essential to creating a more balanced and productive regulatory framework.
This approach, according to Buterin, would encourage innovation while ensuring that investors are protected and well informed about the projects they support.
About the author
Gamza Khanzadaev
Financial analyst, trader and cryptocurrency enthusiast.
Gamza majored in finance and credit with a specialization in securities and financial derivatives. He also completed a master’s program in banking and asset management.
He wants to help cover economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.