Ethereum co-founder Vitalik Buterin has strongly criticized MicroStrategy chairman Michael Saylor for advocating that major banking institutions should be responsible for the custody of Bitcoin. Buterin labeled Saylor’s comments as “insane,” challenging his support for regulated institutions to take control of digital assets.
Buterin’s Concerns Over Centralized Custody
Buterin, alongside other crypto figures like Casa’s Jameson Lopp and ShapeShift’s Erik Voorhees, raised concerns that endorsing third-party custody of Bitcoin could undermine the core decentralized principles of cryptocurrency. Buterin argued that relying on large financial institutions for custody contradicts the essence of crypto and could pave the way for regulatory capture, where powerful entities hold undue influence over the crypto space.
In a recent post, Buterin highlighted the risks of centralized custody, emphasizing that such a strategy could fail and goes against the self-sovereignty ethos that Bitcoin was built upon.
Saylor’s Defense of Big Bank Custody
Saylor, in an interview with financial markets reporter Madison Reidy, countered by criticizing what he called “crypto-anarchists” who reject compliance with government regulations and taxes. Saylor argued that non-compliance increases the risk of asset seizure, and that “too big to fail” banks offer a more secure custody solution for Bitcoin holders. This stance is at odds with his previous support for self-custody, where individuals retain control over their private keys.
Saylor’s remarks came in the wake of a major Bitcoin loss incident at FTX, which served as a reminder of the risks of leaving assets on centralized platforms. MicroStrategy, under Saylor’s leadership, holds a significant amount of Bitcoin, with Saylor personally owning over $1 billion in BTC as of August 2024.
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