Vitalik Buterin, the founder of Ethereum, joined the ongoing discussion on cryptocurrency regulation over the weekend.
Sam Bankman-Fried, the CEO of FTX, has come under fire for his opinions regarding DeFi regulation.
After stating that it “feels unfair to let other people get attacked by CT but never actually poke my own head out,” Buterin made the decision to express his ideas.
According to Vitalik, the cryptocurrency sector needs more time to develop before receiving more attention, so it shouldn’t be pursuing “large institutional capital at full speed.”
The creator of Ethereum argued that the market needs to be “free to act” and that a delay in widespread adoption is advantageous for the sector.
Vitalik, in contrast to SBF, believes that regulations that keep crypto fully open but slow down adoption are preferable. SBF argued that compromises may be necessary to keep crypto regulation free at a protocol level.
According to Vitalik, regulations requiring any kind of KYC for front-end DeFi products would serve no purpose in discouraging hackers. Hackers create code to interact directly with smart contracts, so malicious parties typically ignore a project’s front end.
In addition, Vitalik proposed that laws support “zero-knowledge proofs,” which would enable automated enforcement of the law.
He views ZKPs as a technological advancement that can be used to enhance regulatory practices as opposed to conflicting with them.
SBF commented on Vitalik’s thread, calling the remarks “pretty reasonable.”