Ethereum Co-founder Expresses Dissatisfaction with US Crypto Regulations

In 2022, in response to a post from a member of the Ethereum Foundation, Vitalik Buterin listed some DeFi regulations that he believed would be helpful: limits on leverage, requiring transparency about audits, FV or other security checks were done on contract code, and usage gated by knowledge-based tests instead of plutocratic net-worth minimum rules.

He continued by later saying “The main challenge with crypto regulation (especially in the US) has always been this phenomenon where if you do something useless, or something where you’re asking people to give you money in exchange for vague reference to potential returns at best, you are free and clear, but if you try to give your customers a clear story of where returns come from, and promises about what rights they have, then you’re screwed because you’re “a security”.

Buterin’s comments come in the wake of a U.S. judge’s June 28, 2024 decision to dismiss the claim by the U.S. Securities and Exchange Commission (SEC) that secondary sales of Binance’s BNB token qualify as securities. This ruling was influenced by the SEC vs. Ripple case, where the economic reality of transactions was emphasized in applying the Howey Test. The judge ruled that secondary sales of Binance Coin do not qualify as securities, marking a significant win for crypto traders.

https://crypto.news/vitalik-buterin-crypto-regulation-screwed-security/