Vitalik Buterin, the visionary behind Ethereum (ETH), has recently voiced concerns over the current state of crypto regulations, which he describes as a form of “anarcho-tyranny” that could potentially stifle the industry’s growth.

In a discussion on Warpcast, a decentralized social platform, Buterin highlighted the paradoxical regulatory environment in the cryptocurrency sector. He pointed out that founders who are forthright about their business plans often find themselves in the crosshairs of regulatory bodies for supposedly engaging in the distribution of unregistered “securities.”

Buterin elaborated on the regulatory challenges, particularly in the United States, stating, “There’s this odd regulatory dynamic where actions that are essentially meaningless, or at best, involve soliciting funds with only nebulous promises of possible returns, seem to escape scrutiny. However, those who attempt to provide their customers with a transparent narrative regarding potential returns and explicit rights immediately attract attention for issuing ‘securities.’ This creates a perverse incentive structure that is ultimately more detrimental to the industry than straightforward anarchy or despotism would be.”

He expressed a preference for a regulatory framework that would deem it riskier to issue tokens without a clear, long-term justification for their economic value. Conversely, those who do provide a solid rationale and adhere to fundamental best practices should not have to worry about regulatory repercussions. Achieving this ideal state, according to Buterin, necessitates sincere efforts from both regulators and the crypto industry.

In a show of support for the crypto community, Buterin recently donated a significant sum to aid the legal defense of Tornado Cash developers Alexey Pertsev and Roman Storm. Transaction records on the Ethereum blockchain explorer Etherscan reveal that Buterin sent 30 ETH, valued at $113,678 at the time, to the “Free Alexey & Roman” legal fund on May 30th.

Tornado Cash is a coin mixing service on the Ethereum network that enables users to conduct anonymous cryptocurrency transactions. The service faced sanctions from the US government in 2022, with allegations that it facilitated the laundering of illegal funds and posed a threat to national security.

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