Saylor's Comments On Bitcoin Custody Are "Batshit Insane" - Buterin

Authored by Martin Young via CoinTelegraph.com,

MicroStrategy founder Michael Saylor’s suggestion that crypto users should use big banks to custody Bitcoin is “batshit insane,” Ethereum co-founder Vitalik Buterin said, adding to a growing backlash from the crypto community. 

“I’ll happily say that I think Saylor’s comments are batshit insane,” said Buterin in response to an Oct. 22 post on X from Bitcoin custody firm Casa’s chief security officer and cypherpunk Jameson Lopp, who was extolling the virtues of self-custody. 

It’s the latest criticism aimed at MicroStrategy’s Saylor after he suggested on Oct. 21 that Bitcoin holders should rely on “too big to fail” banks that are “engineered to be custodians of financial assets” - an apparent U-turn on his previous comments about self-custody. 

Source: Vitalik Buterin 

Buterin said Saylor appeared to be “explicitly arguing for a regulatory capture approach to protecting crypto,” such as investment managers BlackRock and Fidelity holding the asset with “all the lawmakers and law enforcement arms invested in those entities.”  

“There's plenty of precedent for how this strategy can fail, and for me, it's not what crypto is about.”

Saylor also called out “crypto-anarchists” during the interview with financial markets reporter Madison Reidy, warning that non-regulated entities that don’t acknowledge government, taxes or reporting requirements will increase the risk of the asset’s seizure. 

Criticism of Saylor’s comments has been mounting since.

Lopp argued that self-custody is important to individual Bitcoin holders, and that “It’s important for the continued strengthening and improvement of the entire network.”

On Oct. 22, ShapeShift founder Erik Voorhees added to the rebuttal, saying that the ability to withdraw Bitcoin into self-custody is the “check that prevents the centralization and corruption inevitable under any other arrangement,” before adding: 

“For Saylor to so casually dismiss this fundamental precept is wholly inappropriate and deserves the backlash.”

In an interview with Blockware head analyst Joe Burnett back in 2022, Saylor gave several examples of why he thought crypto should be custodied by large centralized intermediaries. 

“This was three weeks after FTX imploded and users lost BTC left on the platform,” the Blockware team noted in a post on X on Oct. 22.