Ethereum co-founder Vitalik Buterin has branded recent comments from MicroStrategy supremo Michael Saylor on bitcoin custody and the role that banks should play in it as “batshit insane.”

Buterin made the comment in response to an X post by bitcoin custody firm Casa’s chief security officer Jameson Lopp. “Bitcoin self custody isn’t just about being a paranoid mountain man,” wrote Lopp. “There are many long-term negative ramifications to convincing people to trust third-party custodians.”

He then went on to list a number of these ramifications, including an increased risk of loss or seizure, and the deprioritization of permissionless scaling. He concluded by saying, “Self custody is not merely important to individual bitcoin holders. It’s important for the continued strengthening and improvement of the entire network.”

Read more: Is Bitcoin protected by the First Amendment as Michael Saylor says?

On Sunday, Saylor posted a video to X and YouTube in which he defended his belief that large financial institutions will end up owning a large and ever-growing portion of bitcoin’s supply.

He claimed that the Bitcoin network will improve as companies and governments displace “crypto-anarchists.” He also claimed that institutions like BlackRock or MicroStrategy, unlike self-sovereign Bitcoiners, “will reliably file and pay their taxes,” and poked fun at Bitcoiners who insist on self-custody by saying, “You have an OG crypto community that’s very hardcore about it, but if you look at where all the money is — 99.9% of the money — is actually in the traditional economy.”

Read more: The many weird AI depictions of Michael Saylor

Admitting that he “probably did more than most to spread the ‘mountain man’ trope,” Buterin explained that Saylor “seems to be explicitly arguing for a regulatory capture approach to protecting crypto,” and pointed out that, “There’s plenty of precedent for how this strategy can fail.”

He rounded off his reply by saying, “for me, it’s not what crypto is about.”

There also seems to be a certain amount of irony to Saylor’s comments, given that he paid $40 million to settle claims that he evaded tax payments and $8.5 million to settle claims of accounting fraud.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Vitalik Buterin: ‘Batshit’ Michael Saylor comments ‘not what crypto is about’ appeared first on Protos.

The crypto community is looking for someone to blame for Ethereum’s recent underperformance, and they appear to have found their scapegoat. On August 1, someone posted a photo of Vitalik Buterin and an attractive woman wearing matching plush hats, naming her his ‘girlfriend.’

She would, the poster claimed, allow the brilliant co-founder to focus on Ethereum development and spark a rally to $10,000 per coin. Unfortunately, this hasn’t turned out to be the case.

Indeed, over the past week, Solana has outperformed ether by 9%, and over the past year, ether is up just 29% compared to Solana’s 400%. Ether is even underperforming Tron and meme coins like Pepe over the last 12 months.

It wasn’t the first time the Ethereum community has tried to ‘ship‘ Vitalik with female influencers or selfie-posing fans. Other ‘girlfriends’ seen with Vitalik derive from a restaurant photo, conference selfie, and phallic memes.

This morning, the same account that posted the original 1 million-impression tweet posted a photo of another ‘girlfriend.’ This time, the post claimed, the new girl would allow Vitalik to become so productive that ether would rally to $50,000.

These memes have some comedic appeal in part because they reflect subtle truths. Although the women in these photos might not be romantically involved with Buterin, there’s a widespread belief that because he’s so wealthy, he can date the most attractive women. Indeed, he is personally worth at least nine figures and might be a billionaire.

Read more: This boring TikTok went viral after pivoting to Vitalik Buterin cringe

CoinTelegraph later ripped off the original engagement-farming post, gaining a further 360,000 impressions.

First you get the crypto, then you get the women

Men in crypto have long professed a belief that success in crypto somehow culminates with earning trophy girlfriends. An early bitcoin influencer claimed that buying a memetic quantity of bitcoin would earn the holder eternal riches and well-endowed women. Similar claims are replete across crypto social media.

Over the last year, developer commits by Ethereum developers total 21,626 — an impressive yet lower number than commits by small altcoins like ICP, ADA, FLOW, or DOT.

For this reason, in addition to a slower rally relative to altcoins, fans shipping Vitalik Buterin with girls they see posing in photos is their way of encouraging him to focus on Ethereum development — even if it comes at the cost of disparaging womens’ role in the community.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Did Vitalik Buterin’s girlfriend stall Ethereum development? appeared first on Protos.

Ethereum founder Vitalik Buterin has sent more than $300,000 to coin mixer Railgun which has also been used by North Korea’s Lazarus Group.

Buterin has been using the service for months, — albeit with smaller sums of money — and today he took a definitive stand in support of it and other coin anonymizing services.

In addition to sending 100 ETH through Railgun, he posted a defense of his actions, claiming “Privacy Is Normal” — a phrase borrowed from Zcash. Buterin defended Railgun in particular, claiming that its novel use of zero-knowledge proofs allows users to demonstrate the lawful origin of funds without doxxing transaction histories.

Railgun uses smart contracts to prove membership within ‘custom association sets’ to satisfy certain regulations.

Buterin has advocated for private transactions for years and has spoken positively about Zcash, Monero, privacy-preserving rollups, stealth addresses, and the cryptographic privacy of zero-knowledge succinct non-interactive arguments of knowledge (ZK-SNARKs).

Read more: US Treasury sanctions OTC traders for aiding Lazarus hackers

Coin mixers like Railgun attract bad actors

Financial opacity also attracts bad actors. One of the first use cases for cryptocurrency was facilitating illegal e-commerce via Silk Road. Similarly, Railgun’s privacy has attracted nefarious operators. These include Lazarus Group, the most notorious blockchain hacking group closely tied to North Korea and China.

Lazarus Group has been sanctioned by the US Treasury’s Office of Foreign Assets Control since September 13, 2019 and support for the group is illegal. Lazarus is a frequent user of Railgun.

Nevertheless, crypto’s wealthiest billionaire has unapologetically endorsed one of the tools that Lazarus Group uses. In his words, “privacy is normal,” and anyway, Railgun “makes it much harder for bad actors to join the pool.” 

Much harder for bad actors. How reassuring.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Vitalik Buterin endorses one of North Korea’s favorite coin mixers, Railgun appeared first on Protos.

Ethereum whistleblowers Steven Nerayoff and TruthLabs have alleged numerous incidents of misconduct by early Ethereum insiders, with Nerayoff currently teasing the release of apparently never-before-heard audio recordings of Vitalik Buterin.

Nerayoff is promising to reveal scandalous evidence that he believes proves that Buterin copied his idea of issuing utility tokens via ICOs. He is also threatening to sue over his supposed invention.

Of course, fraud by third-party creators who simply used the Ethereum platform to create scam tokens or NFTs is nothing new. Many Ethereum ICO fundraisers during the 2017-2018 craze turned out to be doomed. Indeed, most ICOs have fallen to near-$0.

Similarly, most NFTs are now worthless. Ethereum insiders, however, are not responsible for those scams.

What is new, however, is the fact that Steven Nerayoff and an unrelated researcher, TruthLabs, have both alleged misconduct by Ethereum founders and their allies and want to release the supposedly irrefutable evidence.

Read more: These six-figure NFTs are down 99%

Steven Nerayoff: Baffling yet impossible to ignore

Nerayoff makes sweeping claims that are often difficult to understand, yet he does speak with some authority. He was a former legal advisor to the Ethereum Foundation. He claims that Vitalik Buterin once lived with him in New York and worked in an office that Nerayoff rented for the benefit of Ethereum.

Some observers used to dismiss most of Nerayoff’s claims due to his personal credibility taking a hit when the US Department of Justice (DoJ) charged him with criminal extortion in 2019. However, a New York judge dismissed that charge in May 2023, cleaning up his reputation considerably.

Although Nerayoff has posted his recent, Ethereum-related claims to X, he says his legal team is working on organizing all the documents involved to substantiate his new claims. Curiously, he claims to have created a non-X platform to ostensibly ensure that the information he publishes will not be censored.

On November 14, he promised to publish specific allegations against Ethereum insiders “within 48 hours, hopefully less.” There have, however, been delays, with Nerayoff claiming that logistics and the creation of NFTs were responsible for most of the hold-ups.

Did Vitalik Buterin ask Nerayoff to rescue the Ethereum Foundation?

Nerayoff claims that one of his upcoming NFTs will include a 2015 recording of Vitalik Buterin asking Nerayoff for a “rescue plan” for the Ethereum Foundation.

A transcript of Nerayoff’s appearance on one of Mario Nawfal’s “Twitter Spaces” indicates that the NFT will include audio asking Nerayoff to help restructure the Ethereum Foundation.

This continues Nerayoff’s pattern of claiming he created many of the standards that made Ethereum successful, including the ‘fungible’ tokens behind ICOs. The ERC-20 standard originally described the most commonly used API for Ethereum-based fungible tokens. The document doesn’t list Nerayoff as a contributor unless he was going by a pseudonym.

Nerayoff and TruthLabs question Ethereum’s The DAO

TruthLabs supposedly found evidence that the Ethereum Foundation and Slock.it were behind the infamous hack of The DAO that precipitated the hard fork between Ethereum (ETH) and Ethereum Classic (ETC).

Read more: Ethereum centralization is becoming a serious problem

According to Nerayoff, the DAO hack was an inside job. Publicly, Slock.it was hit hard, and eventually sold to Blockchains.com in 2019. Blockchains.com rebranded Slock.it to BC Development Labs.

So, what did the Securities and Exchange Commission (SEC) say about The DAO? According to Commissioners, The DAO insiders sold DAO tokens as unregistered securities. However, the SEC declined to file charges in that particular case.

Nerayoff and TruthLabs also call out ex-SEC Director Bill Hinman

By now, it is no secret that former SEC chief William Hinman likely had an Ethereum-related conflict of interest while working for the SEC. Protos has previously covered Hinman’s financial conflict of interest and its potential impact on the SEC v. Ripple case.

Bill Hinman routinely met Simpson Thacher & Bartlett employees, which received funding from a pro-Ethereum entity, including an employee who worked for its Hong Kong division. Hinman also did not divest from his financial interest in the Simpson Thacher, which had done work for the Ethereum Foundation, despite being warned to by the SEC’s ethics office.

However, according to Nerayoff, the corruption among government officials might go far beyond just William Hinman’s opining that ETH offers were not securities transactions. 

A transcript of a Mario Nawfal X audio space reveals that Nerayoff believes the SEC, DoJ, and FBI fabricated charges against him. “They were looking to get as many people in this industry as possible. And that all started at the very same time,” he said. He also implied that Hinman was in on the Ethereum inside job.

Some individuals were skeptical. However, attorney Michael Scotto opined that Nerayoff “has a case.”

Nerayoff acknowledged that his lawyers advised him not to post about it in a lengthy X post. However, he says he cares more about holding people accountable than the money he allegedly lost.

Mistakes in Gary Gensler’s MIT course?

Prior to becoming chairman of the SEC, Gary Gensler taught a course about blockchain at MIT.

TruthLabs has questioned why Gensler used this class to spread, in TruthLabs’ opinion, false information about Ethereum’s history. According to TruthLabs, his allegedly false teaching material included Gensler’s claim that Canadian VCs mostly supported Ethereum during its pre-ICO days. Rather than Canadian money, as Protos has covered, Ethereum’s extensive ties to Chinese money. If deflecting attention from China to Canada was intentional, TruthLabs posits that William Hinman might not be the only SEC official with an interest in misrepresenting Ethereum’s financial ties.

Other claims made in Gensler’s lecture on Ethereum included the idea that Joseph Lubin bought 10% of the ICO. Lubin disagrees with this percentage, claiming he never owned more than half a percent of Ethereum’s supply.

Nerayoff called Lubin out on this, citing a video in which Lubin said buying large quantities of tokens, or buying them to speculate, could become a sign that the token is a security.

Read more: Here’s why ‘news’ attacking Gary Gensler is all over crypto media

Revisiting Ethereum’s ties to China

Anyway, TruthLabs claims that Chinese entities Wanxiang Blockchain Labs and Fenbushi Capital were involved in setting up some of Lubin’s Ethereum wallets.

Protos has previously covered Ethereum’s extensive ties to Chinese money. 

TruthLabs also found evidence that Wanxiang Blockchain Labs set the Ethereum Foundation wallet up. Wanxiang’s Dr. Xiao Feng went on record about its early support for Ethereum, pledging $500,000 to help launch it.

TruthLabs also notes a coincidence that Wanxiang Group and MIT announced a ‘partnership’ in March 2018. TruthLabs notes that it is possible that Chinese government-connected individuals could have used proxy or puppet entities to exert influence over Ethereum.

Laura Shin’s book, The Cryptopians, detailed allegations that Vitalik Buterin tolerated an out-of-place Chinese national named Ming Chan, who served as the Ethereum Foundation’s executive director, for a curious span of time — even after she clashed with other foundation members.

Interestingly, Chan assumed that role in 2015 — the same year that Nerayoff alleges Buterin asked him about restructuring or saving the Ethereum Foundation.

Ethereum also famously published its whitepaper first in two languages: English initially, and then Chinese.

Finally, and somewhat off-topic, Nerayoff makes yet another assertion: Vitalik Buterin could have shorted Ethereum at some point.

Awaiting evidence from Steven Nerayoff, TruthLabs

In summary, Nerayoff and TruthLabs’ allegations are seemingly impossible to ignore. However, it’s important to remember that they are just that: allegations. 

Nerayoff claims to be releasing another round of evidence today or tomorrow and intends to fight for his intellectual property rights in court. 

Ethereum initially wanted to build a decentralized digital asset ecosystem. Much of its initial marketing billed it as a “world computer” that could be used for blockchain applications like smart contracts. However, since inception, Ethereum has maintained strong ties to Chinese executives with curious motivations. 

Both Nerayoff and TruthLabs claim to be interested in publicizing their version of the truth about Ethereum’s origins and initial motivations. Many observers have been and will continue to await their allegedly irrefutable evidence.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Former advisor Steven Nerayoff hypes Ethereum scandal exposé appeared first on Protos.

Fairness, resistance to censorship, and the ability to make better decisions are among the reasons why highly decentralized DAOs (decentralized autonomous organizations) should resist the temptation to ape more traditional corporate setups, according to Ethereum creator Vitalik Buterin.

Buterin made the claims in an article published on his website. In the post, he also hits back at critics who claim that DAO governance is “inefficient” and that “DAO idealists are naive.”

“Recently, there has been a lot of discourse around the idea that highly decentralized DAOs do not work, and DAO governance should start to more closely resemble that of traditional corporations,” begins Buterin.

However, he argues this position is wrong before going on to outline the three main reasons why.

Decentralization breeds compromise

The first situation in which decentralization is vital is, according to Buterin, when making decisions in so-called ‘concave’ environments. Concave environments are those in which a compromise is preferred over a ‘coin flip’ or ‘convex’ approach.

Concave situations include judicial decisions, public goods funding, and establishing tax rates, while convex environments would include planning a military campaign, responding to a pandemic, or settling on tech choices in crypto protocols.

Read more: Tribe kills DAO, overrules vote to pay crypto debt

“When decisions are convex, decentralizing the process of making that decision can easily lead to confusion and low-quality compromises,” writes Vitalik.

“When decisions are concave, on the other hand, relying on the wisdom of the crowds can give better answers. In these cases, DAO-like structures with large amounts of diverse input going into decision-making can make a lot of sense,” (our emphasis).

DAOs are like BitTorrent

Next up, Vitalik lays out how great decentralization is for resisting censorship. He states that a DAO or protocol needs to be able to function and defend itself from external attacks that may come from large corporate or even “state actors.”

He then goes on to draw parallels between DAOs and file-sharing platform BitTorrent, pointing out that, like BitTorrent, DAOs “should be providing a service that isn’t just evading permanent censorship, but also evading mere instability and disruption.”

Read more: How Uniswap’s voting system is unfairly favoring the richest token holders

When it comes to DAOs, there’s safety in numbers

Finally, Vitalik turns his attention to the subject of ‘credible fairness.’ The primary function of a DAO he says, is not just to resist nation states, but to take on some of their functions.

This often involves “maintaining basic infrastructure” and because governments are unable to adequately oversee DAOs, they need to be structured to oversee themselves. According to Vitalik, this requires decentralization.

He then lists three types of DAO and DAO components that all require strict governance, making the case that, “governance being attackable, from the outside or the inside, can easily lead to very big problems.”

Governance, he reasons, “doesn’t just need to be robust, it needs to credibly convince a large and untrusting public that it is robust.”

According to the post, distributed decision-making power — ie less power given to any one person or small number of people — also means that collusion or nefarious activity is more likely to be spotted and revealed.

There’s still (a little) room for a corporate approach

Vitalik does, however, make at least a small concession to the more traditional way of doing things. Specifically, when a DAO is called upon to carry out specific complicated tasks.

“A system that was intended to function in a stable and unchanging way around one set of assumptions, when faced with an extreme and unexpected change to those circumstances, does need some kind of brave leader to coordinate a response,” he admits.

Read more: Explained: Solend DAO’s whale wars and DeFi lending drama

“Realistically, we probably only need a small number of DAOs that look more like constructs from political science than something out of corporate governance. But those are the really important ones,” (our emphasis).

For more informed news, follow us on Twitter and Google News or listen to our investigative podcast Innovated: Blockchain City. 

The post Vitalik argues why DAOs should shun the corporate approach appeared first on Protos.