Vitalik Buterin Calls For Bank Deposit Insurance-Like Protection For Small Crypto Investors

Vitalik Buterin, the co-creator of Ethereum ETH/USD, wants more protection for the average cryptocurrency investor.

What Happened: Buterin pointed to the Federal Deposit Insurance Corporation in the United States and Singapore’s employment law as examples of protecting vulnerable individuals.

The obvious precedent is FDIC insurance (up to $250k per person)

An interesting unrelated one is Singapore employment law. Stronger regulation for low-earning employees, and a more figure-it-out-yourself approach for the wealthier.

IMO things like this are good hybrid formulas. pic.twitter.com/25XkfE8UVc

— vitalik.eth (@VitalikButerin) May 14, 2022

Buterin said that the FDIC is a precedent, in the sense it extends the protection of up to $250,000 per person in terms of deposit insurance.

Buterin, who is also a Singaporean citizen, said that in the city-state there is “stronger regulation” for low-earning employees and a more “figure-it yourself” approach for the wealthier. 

“IMO things like this are good hybrid formulas,” said Buterin. 

See Also: Best Crypto Debit Cards

Why It Matters: On Sunday, Buterin reacted to the TerraUSD (UST) fiasco and the resulting collapse in the value of the stablecoin along with the sharp depreciation in Terra (LUNA). 

The Ethereum co-creator said he strongly supports “coordinated sympathy and relief for the average UST smallholder” on Twitter.

Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb about "20% interest rates on the US dollar" by an influencer, personal responsibility and SFYL for the wealthy. https://t.co/YfNlpvAizg

— vitalik.eth (@VitalikButerin) May 14, 2022

Recently, a video emerged in which Buterin was seen saying weeks ahead of UST’s collapse that certain projects are “doing insanely risky undercollateralized, barely collateralized sort of stuff.”

Price Action: ETH traded 3.05% lower over 24 hours at $2,079.02, according to data from Benzinga Pro. 

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