Vitalik Buterin calls Michael Saylor’s comments on Bitcoin ‘insane’

Ethereum co-founder Vitalik Buterin criticizes MicroStrategy chairman Michael Saylor’s remarks that suggests he is in favor of crypto users using big banking institutions to hold custody over Bitcoin.

In an X post, Vitalik Buterin calls Michael Saylor “batshit insane” over comments he made in an interview with Madison Reidy related to Bitcoin(BTC). He disagrees with Saylor’s remarks, specifically the ones where he seemed to be “explicitly arguing for a regulatory capture approach to protecting crypto.”

Saylor argued with Saylor’s approach as it implies that regulated public entities should hold digital assets so that regulators and law enforcements will be more inclined to invest in those institutions. Regulatory capture could lead to major financial institutions eventually taking over Bitcoin.

Many other figures like Bitcoin custody firm Casa’s chief security officer Jameson Lopp and ShapeShift founder Erik Voorhees also shared Buterin’s view, saying that persuading people to rely on third party custodians could bring about a number of negative effects and that it goes against the decentralized nature of crypto.

“There’s plenty of precedent for how this strategy can fail, and for me it’s not what crypto is about,” said Buterin in his post.

In his interview with financial markets reporter Madison Reidy on Oct. 21, Saylor took a jab at those he call “crypto-anarchists,” which are non-regulated entities that don’t acknowledge government, taxes or reporting requirements. He said believes that they increase the risk of digital assets being seized.

Instead, Saylor suggested that Bitcoin holders should rely on “too big to fail” banks that are “engineered to be custodians of financial assets.” His recent comments seemingly contradict his previous approach that championed self-custody in the crypto space.

Self-custody means individuals control and protect their own assets, not banks or exchanges.

In a 2022 interview with Blockware, Saylor stated that most individuals, families and small to medium companies prefer to hold their own private keys or a multi-sig deal instead of entrusting their funds to large banking institutions.

“I don’t think it’s a problem, I think that everybody will have the ability to take custody of their own Bitcoin,” said Saylor.

Blockware notes in their post that Saylor’s comments at that time came through three weeks after the collapse of FTX, where users lost billions worth of BTC left on the platform, leading to the ongoing legal dispute.

Meanwhile, MicroStrategy holds 252,220 BTC, making it the largest Bitcoin reserve owned by a corporation. Saylor himself revealed that he owns more than $1 billion worth of Bitcoin as of Aug. 2024.