Vitalik Buterin criticized the restrictive regulation of crypto industry
Regulatory initiatives that strictly limit the functions of cryptocurrency projects can simplify the latter access to institutional capital, but adversely affect the development of the industry. This was stated by the co -founder of Ethereum Vitalik Buterin.
Basically, especially at this time, regulation that leaves the crypto space free to act internally but makes it harder for crypto projects to reach the mainstream is much less bad than regulation that intrudes on how crypto works internally.
– Vitalik.ETH (@vitalikbuterin) October 30, 2022
According What are tokenized to Butaterin, the players of the industry should not “chase large institutional capital”, since the ecosystem is not yet ready for such volumes of investment.
“I’m even glad that many ETFs are delayed. […] In essence, especially now, regulation that leaves the crypto industrial industry in internal actions, but makes it difficult to access to the mainstream, is much less detrimental than regulation, which intervenes in the internal work of cryptocurrencies, ”he wrote.
Ethereum co-founder also criticized the idea of introducing KYC procedures into the front-end defi service. According to him, the step will negatively affect user experience, but will not increase the safety of projects.
“Hackers already write customs code for interaction with contracts. Exchange is certainly a more reasonable place for KYC, and this is already happening, ”he explained.
Buterin said that the regulators have two main goals – consumer protection and counteracting criminals. The co -founder of Ethereum noted that the introduction of restrictions on the size of the credit shoulder and the requirements for transparency in terms of inspections of code are more effective measures in the context of these tasks.
He also added that the relevant laws should be written in such a way that the requirements can be satisfied with the help of evidence with zero disclosure (ZKP).
“ZKP offers many new opportunities to satisfy a regulatory policy while maintaining confidentiality. We must take advantage of this, ”wrote Buterin.
Earlier, the head of FTX Sam Bankman-Fried spoke about his vision of the regulation of the cryptocurrency industry.
Recall that in September 2022, the head of the ECB and the Fed was called upon to strengthen the supervision of the Defi sector.
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