Vitalik Buterin, the creator of Ethereum (ETH), has criticized the current regulatory landscape for cryptocurrencies, likening it to an “anarcho-tyranny” that he believes stifles innovation within the industry. In a recent post on the decentralized social platform Warpcast, Buterin argued that crypto founders who operate transparently often find themselves targeted by regulators under allegations of issuing unregistered securities.

“The main challenge with crypto regulation, especially in the US,” Buterin stated, “is the paradox where projects offering vague promises and unclear returns face little scrutiny, while those striving for transparency about their business models are penalized as ‘securities.’ This ‘anarcho-tyranny’ creates a perverse incentive structure that harms the industry more than either complete regulatory chaos or strict tyranny.”

Buterin advocated for a regulatory shift towards rewarding projects that provide clear long-term plans for economic value and adhere to best practices, suggesting that such clarity should mitigate regulatory risk. He emphasized the need for constructive engagement between regulators and the crypto industry to achieve this balance.

Recently, Buterin demonstrated his support for the legal battle of Tornado Cash developers Alexey Pertsev and Roman Storm by donating a substantial sum. Records from the Ethereum blockchain explorer Etherscan indicate that Buterin contributed 30 ETH, valued at $113,678 at the time, to the “Free Alexey & Roman” legal fund on May 30th.

Tornado Cash, known for facilitating anonymous Ethereum transactions, faced US sanctions in 2022 over concerns of money laundering and national security risks.

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