Vitalik Buterin Slams EU Digital Services Act: Why the ’No-Space’ Approach Is a Disaster for Crypto
Ethereum's co-founder just threw a grenade into Brussels' regulatory playbook. Vitalik Buterin's latest critique of the EU's Digital Services Act (DSA) isn't just another tech rant—it's a direct challenge to a framework that could strangle innovation in its crib.
The Core Conflict: Permissionless vs. Permissioned
The DSA's so-called 'no-space' model demands platforms know every user. It's a compliance dream for traditional finance, built on gates and guards. But for blockchains? It's architectural heresy. These networks thrive on pseudonymity and open access—the very things the DSA aims to stamp out. Buterin argues you can't graft a walled garden onto a protocol designed as a public square.
Innovation's Collateral Damage
This isn't just about privacy. It's about the next wave of decentralized apps, DAOs, and financial tools that haven't been invented yet. Heavy-handed, one-size-fits-all rules risk creating a regulatory moat that only the biggest, most centralized players can cross. The little guy gets crushed under compliance costs—a familiar tune for anyone who's watched fintech 'disruption' turn into cozy oligopoly.
The Finance Jab: Because of course.
Watch traditional finance institutions nod along with the DSA's strictures. They've spent centuries building fortresses; new rules that keep the barbarians—sorry, 'innovators'—at the gate just protect their turf. Nothing secures a legacy profit margin like making the upstarts play by your impossible rulebook.
Buterin's warning is clear: Regulate the harmful outcomes, not the foundational technology. The EU's attempt to sanitize the entire digital space could end up sterilizing it instead—leaving a clean, compliant, and utterly barren landscape.
Redefining a free society
Buterin argued that in “a free society, you have to bite the bullet that some people, somewhere, will be selling things that you consider dangerous and saying things you consider disinformation and vicious lies.”
The Digital Services Act (DSA) is seen as one of the European Union’s flagship laws that regulates online platforms. The EU considers the Digital Services Act as a means of ensuring that there is protection of fundamental rights and that there is a SAFE internet.
However, such measures are seen from a different perspective by individuals such as Buterin, who foresees that Europe is slowly progressing toward an ideology that celebrates a clean and hygienic internet space that is free from corporate or fascist infections.
Buterin analogized the ideal online world with biotic environments and not impenetrable fortresses. This is because the biggest problem with online communities such as X isn’t the presence of fringe communities, but rather that the algorithm promotes and shoves their content into the faces of the wider public.
He referenced the Taiwanese model introduced by Audrey Tang as a possible way for online communities to offer incentives for more healthy online conversation without necessarily banning everything.
Technical solutions and future policies
Buterin also recommended some technical and policy changes to avoid what he terms the “dark path of having something that claims to support fundamental rights but actually is not trusted by anyone.” These included encouraging the EU to begin enabling rather than hindering its users through interoperability and competition.
By analogizing to his own position on the EU’s USB-C charging port initiative, which he supported because of its market-enhancing competition rationale, he encouraged social media to “support incentivizing social platforms to be more open, and to be more transparent.”
He proposed one particular idea about requiring platforms to share their algorithm with a one to two-year lag. He also spoke about zero-knowledge proofs (zk-proofs) to ensure that there is no discrepancy between the algorithm used presently and one that is later shared publicly. In essence, he opposed banning anonymity on social media.
In its place, he suggested privacy-preserving macro-scale analytics to determine which groups promote particular ideas. The intervention of one of the most celebrated players in the decentralized tech world draws attention to the growing tensions running between the libertarian ethos of the Silicon Valley model and the ambitions of the European regulators.
Buterin’s take on the issue was to spot a chance to reiterate the value of the freedom of speech by standing up for the ideal of pluralism against the manipulation of the powerful. His warning was that if the EU keeps on the same course, it risks building a world that pretends to be in support of all the basics of human freedom but gets perceived as the ‘basic human right’ to follow in the footsteps of a few tech elites. It should be a place where the harmful stuff doesn’t dominate, but isn’t a place where it’s all eliminated.
Also Read: Vitalik Buterin Sells UNI, KNC, and DINU for $16.8K USDC
