Ethereum co-founder Vitalik Buterin has posted a warning about TRUMP, political memecoin, and the current state of the cryptocurrency industry.

He noted that Gensler has left a legal loophole in distinguishing governance tokens from securities, which has enabled a wave of bad actors to thrive.

Buterin vs TRUMP: The Battle for the Future of Cryptocurrency

Vitalik Buterin, the co-founder of Ethereum, has expressed growing concern about TRUMP and other political memecoins. In a lengthy post on social media, Buterin highlighted the long-term vision for the cryptocurrency industry, stating that "we have entered a new order" over the past year.

He noted that the institutional adoption of cryptocurrencies has enabled bad actors to thrive.

Buterin stated:

Now is the time to speak about the reality that large-scale political tokens have crossed a further line: they are not just for fun, and the harm they cause is not just limited to the voluntary mistakes of participants, but they are also unlimited political bribery vehicles, including from foreign countries.

For Buterin, the launch of TRUMP was a turning point. Nearly 94% of the tokens are held by 40 wallets, and scammers have stolen nearly $1 billion, exploiting the hype around TRUMP and MELANIA.

Typically, a sitting U.S. President cannot engage in private business. Therefore, Trump's memecoin has raised significant concerns, even outside the cryptocurrency industry.

However, Buterin does not entirely blame Trump or any other famous memecoin issuer. He noted that former SEC Chair Gary Gensler created a loophole in securities law by designating governance tokens as a potentially separable concept.

From Buterin's perspective, Gensler "will never be hailed as a hero, even among cryptocurrency skeptics" due to this loophole.

The former SEC chair has been widely criticized by the cryptocurrency industry for his regulatory crackdown, even after approving the Bitcoin ETF. Gensler has never provided clarity on regulations or closed the loopholes in existing regulations.

However, with the benefit of hindsight, Buterin stated that the cryptocurrency industry's "part-compliant, part-rebellious" reaction has directly led to TRUMP. Nevertheless, he still sees a path forward.

Buterin concluded:

There is a bright future for transparent capital allocation projects. In terms of potential, we can come up with ways to ensure alignment with community desires as well as protect key values like privacy, security, open standards, and open source. The acceleration is coming both ways; our task is to choose the brightest path.

Buterin noted that the entire DeFi community has a responsibility to educate newcomers about long-term success and wealth-building, returning to honest token-based fundraising, and actively protecting this space.

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