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US Cryptocurrency Regulation Promotes ‘Useless’ Tokens
Ethereum co-founder Vitalik Buterin has criticized the U.S. regulatory approach to cryptocurrencies, particularly the consistent classification of utility tokens as securities.
Buterin argues that this approach discourages meaningful crypto projects and promotes the creation of “useless and vague” tokens.
Buterin advocates for balanced cryptocurrency regulations to foster growth
The co-founder of Ethereum believes the current regulatory regime has put well-intentioned cryptocurrency developers on the spot. According to Buterin, this approach harms the cryptocurrency industry and could lead to anarchy or tyranny.
“If you do something pointless, or something where you ask people to give you money in exchange for vague references to potential returns, at best, you’re free and clear, but if you try to give your clients a clear story of where they come back come and promise what rights they have, then you’re screwed because you’re ‘a safety‘,” Buterin said.
Instead, imagine a future where issuing a token without providing a clear long-term story for its economic value is riskier, while projects that provide such history and follow best practices are safe. However, achieving this requires “a good faith commitment from regulators and the industry.”
“I would much rather see us move to the opposite situation, where issuing a token _without_ providing a clear long-term story about why it will maintain or increase its economic value is the riskiest thing, and if _you_ give it such a long-term story and follow basic best practices, then you are safe,” Buterin observed.
To know more: Ethereum (ETH) Price Prediction 2024/2025/2030
Buterin’s stance resonates with many industry leaders who have criticized the U.S. government’s handling of the emerging cryptocurrency industry. Advocates are pushing for regulations tailored to the unique nature of decentralized and cryptocurrency platforms. They believe this approach is critical to safeguarding investors and fostering technological growth without imposing undue restrictions.
However, the SEC led by Gary Gensler has consistently criticized industry participants for not adhering to existing regulations securities laws. For this reason, the financial regulator has declared important crypto assets as Solana and Cardano securities. Additionally, it has filed lawsuits against major cryptocurrency companies such as Coinbase, Binance, and Kraken for their cryptocurrency products that allegedly violate local laws.
To know more: Who is Gary Gensler? Everything you need to know about the SEC chairman
These issues have made cryptocurrencies a significant political issue in the upcoming November election. Cryptocurrency firms are donating to crypto-related political groups to support crypto-aligned candidates. These efforts have yielded significant results, with former President Donald Trump’s support for cryptocurrencies bolstering his position in the election.
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