Ethereum founder Vitalik Buterin shared his thoughts about the raging conversation around crypto regulations in a recent Twitter thread.
Vitalik Buterin discusses how the regulations will affect crypto. The Ethereum founder showed support for any legislation that would make it easier for the industry to reach mainstream adoption. But he classified those who care about how blockchain technology works poorly.
This statement continues with his earlier views, where Buterin emphasized the importance of adoption and why it is necessary to remove all obstacles preventing the crypto market from flourishing.
Ethereum founder Vitalik Buterin on DeFi KYC
Buterin also touched on the idea of KYC for DeFi frontends proposed by FTX founder Sam Bankman-Fried.
The Ethereum founder said that such an initiative is pointless as it will only annoy users. Meanwhile, crypto hackers will still be able to write code that directly interacts with smart contracts.
In Vitalik Buterin’s view, all regulations focus on achieving two goals, consumer protection and making it difficult for criminals and bad actors to move large amounts of money around.
When it comes to moving bad actors money around, Ethereum founder Vitalik Buterin said that these issues are “focused not in DeFi, but in crypto payments at large in general.”
Nevertheless, he recommended rules for the DeFi front end. These included a limit on leverage, a requirement for transparency on audits and security checks for contract code, and limiting use by knowledge-based tests rather than net worth.
“I would love to see the rules written in such a way that the requirements can be satisfied by zero-knowledge proofs as much as possible. ZKPs offer a lot of new opportunities to meet policy goals and maintain confidentiality at the same time, And we should take advantage of that.”
The crypto market needs to mature
Buterin explained that the crypto industry should not lag behind institutional capital as the ecosystem needs to mature first. Still, he’s somehow happy that the SEC is rejecting applications for spot ETFs.
Discussion on regulating crypto has gained traction recently. Notably FTX founder Sam Bankman-Fried published a policy statement detailing how he thinks crypto should be regulated.
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