Vitalik Buterin Is “Kinda Happy” With Delay In Crypto ETFs
- Vitalik Buterin, one of the co-founders of Ethereum revealed that he is “kinda happy” when it comes to the rejection of crypto exchange-traded funds (ETFs) applications.
- He believes that the crypto industry needs more time to attain certain growth and get mature as it is still in its early stages of attracting institutional adoption.
- According to the software developer, before embracing ETFs, the crypto industry requires a regulatory model that can effectively govern the market and weed out bad actors from exploiting the space.
Ethereum co-founder Vitalik Buterin has recently shared his views on crypto regulation, making shocking comments on the rejection of crypto exchange-traded funds (ETFs) applications.
Buterin tweeted a lengthy, controversial Twitter thread on October 30 where he said that he is somewhat “happy” that regulators continued to reject crypto ETFs. He believes that the crypto industry needs more time to attain certain growth and get mature as it is still in its early stages of attracting institutional adoption due to a lack of comprehensive regulatory frameworks.
According to the software developer, before embracing ETFs, the crypto industry requires a regulatory model that can effectively govern the market and weed out bad actors from exploiting the space.
Notably, Buterin’s statements come at a time when the United States Securities and Exchange Commission (SEC) has denied multiple Bitcoin spot ETF applications by major big firms. It is interesting to note that global asset management giant Grayscale Investments, which also filed an application to convert its Grayscale Bitcoin Trust (GBTC) to a full-fledged ETF product, faced a rejection after which it started a legal battle against the regulator.
Apart from ETFs, Buterin also commented on the Decentralized Finance (DeFi) sector’s regulation. He stressed that the idea of Know-Your-Customers (KYC) rules implementation would not prevent hackers from attacking protocols. As such rules do only apply to the platforms’ frontend, they would not stop hackers from writing codes to interact with smart contracts through their backend, he explained.
“The KYC on defi frontends idea does not seem very pointful to me: it would annoy users but do nothing against hackers. Hackers write custom code to interact with contracts already. Exchanges are clearly a much more sensible place to do the KYC, and that’s happening already,” Buterin stated.
Ethereum co-founder also suggested that, rather than imposing net-worth minimum standards, regulations on the front end could concentrate on limiting leverage, requiring transparency regarding audits, and limiting usage via knowledge-based tests.
Buterin emphasized that protecting consumers and preventing bad actors from moving money across the ecosystem are the two key objectives of regulatory laws. He said that the problems with the second objective are prevalent across the whole crypto payment ecosystem, including centralized exchanges like Binance, Coinbase, and FTX, rather than being limited to the DeFi ecosystem.
Buterin is not the only significant industry figure to have recently commented on cryptocurrency regulations. The CEO of the top cryptocurrency exchange, FTX, Sam Bankman-Fried, shared his regulatory goals for the sector earlier this month. He said that the cryptoverse needs definite regulatory oversight to safeguard users from fraud.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
