Vitalik Buterin said that he is happy to see crypto ETFs getting delayed as the market hasn’t reached enough maturation.
Cryptocurrency exchange-traded funds (ETFs) have found it really difficult to make their way to the US market under the regulatory policing of the Securities and Exchange Commission (SEC). Many experts believe that crypto ETFs will pave the way for greater institutional adoption. Interestingly, Ethereum co-founder Vitalik Buterin is ok with the delays in the approval of crypto ETFs. Buterin’s views come amid the current circumstances of crypto winter wherein a lot of crypto firms have been going insolvent.
Buterin and His Stance on Crypto ETFs
In his recent Twitter thread, the Ethereum co-founder spoke regarding the crypto regulatory policies. He explained that there are two main classes of regulatory policy goals:
- Consumer protection
- Making it harder for baddies to move large amounts of money around.
The issues around the second category are that these policy goals are not concentrated in DeFi, but in large-scale crypto payments in general. Sharing a contrasting view, Buterin said:
“Another maybe-controversial take of mine is that I don’t think we should be enthusiastically pursuing large institutional capital at full speed. I’m actually kinda happy a lot of the ETFs are getting delayed. The ecosystem needs time to mature before we get even more attention. 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.”
Dealing with KYCs
Vitalik Buterin also shared his views on crypto regulations and the need for know-your-customer (KYC). He said that “KYCs on DeFi frontends” don’t seem effective to him. Buterin said that it doesn’t little against who have been writing codes to interact with contracts.
Thus, he adds that KYC at crypto exchanges would be better. However, he noted three main regulations on DeFi frontends that would be more useful instead. Buterin wrote:
- Limits on leverage.
- Requiring transparency about what audits, FV or other security checks were done on contract code.
- Usage gated by knowledge-based tests instead of plutocratic net-worth minimum rules.
Furthermore, he added that rule for DeFi on front end should be written in such a way that requirements can be satisfied using zero-knowledge proofs as much as possible. “ZKPs offer lots of new opportunities to satisfy reg policy goals and preserve privacy at the same time, and we should take advantage of this,” he said.
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