- Vitalik Buterin calls Michael Saylor’s suggestion to use big banks for Bitcoin custody “insane.”
- Saylor’s comments faced backlash for seemingly advocating regulatory control over crypto through large institutions.
- Critics emphasize the importance of self-custody in maintaining Bitcoin’s decentralization and user control.
Ethereum co-founder Vitalik Buterin criticized Michael Saylor’s recent suggestion that Bitcoin holders should rely on large banks for custody, calling the idea “batshit insane.” Buterin’s remarks came after Saylor, founder of MicroStrategy, stated that Bitcoin holders should trust “too big to fail” institutions, a shift from his earlier stance on self-custody. The statement sparked widespread criticism within the crypto community, with many arguing that relying on centralized entities goes against the core principles of decentralization.
Backlash Against Saylor’s Custody Proposal
Saylor’s comments have drawn attention since they were made during an interview on October 21, where he suggested that large financial institutions such as BlackRock and Fidelity should be custodians of Bitcoin. Buterin responded to the remarks, saying that this approach promotes regulatory control over crypto and undermines the ethos of decentralization. He warned that such a strategy could fail, referencing past examples of regulatory capture and expressing concern that this is not aligned with what crypto stands for.
Several key figures in the crypto world joined in the backlash. Jameson Lopp, chief security officer at Bitcoin custody firm Casa, emphasized the need for self-custody to protect the integrity of the Bitcoin network. He noted that self-custody is crucial for strengthening the network’s security and preventing centralization. Similarly, ShapeShift founder Erik Voorhees argued that the ability to withdraw Bitcoin into self-custody is essential for preventing corruption and ensuring user control over their assets.
Source: Metlabs
The Importance of Self-Custody in Bitcoin
Critics of Saylor’s stance argue that self-custody allows users to maintain control over their Bitcoin and ensures the network remains decentralized. Buterin’s comments reflect a broader concern that relying on large institutions could lead to centralized control and increase risks for Bitcoin holders. Voorhees highlighted that dismissing this principle is “wholly inappropriate,” and warned that Saylor’s remarks could lead to misguided trust in centralized systems, which have failed users in the past.
Saylor’s view is seen by some as part of a broader debate over how Bitcoin should be managed and whether centralized institutions should play a larger role in its custody and security. This discussion has gained momentum since the collapse of FTX, where many users lost their assets after leaving them on the platform.
