Ethereum co-founder Vitalik Buterin has openly criticized MicroStrategy chairman Michael Saylor’s recent comments suggesting that crypto users should use large banking institutions for Bitcoin custody.

In an X post, Buterin referred to Saylor as “batshit insane” following an interview Saylor had with Madison Reidy regarding Bitcoin. Buterin strongly disagreed with Saylor’s stance, particularly his advocacy for a regulatory capture approach to safeguarding crypto.

Saylor’s argument implies that regulated public entities should hold digital assets, making regulators and law enforcement more likely to invest in these institutions. Regulatory capture could potentially result in major financial institutions taking control of Bitcoin.

Figures like Casa’s Chief Security Officer Jameson Lopp and ShapeShift founder Erik Voorhees echoed Buterin’s sentiments. They argued that encouraging people to rely on third-party custodians undermines the decentralized ethos of cryptocurrency and could have several adverse effects.

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

Buterin stated in his post. He further added,

“I probably did more than most to spread the ‘mountain man’ trope (btw I consider those remarks of mine outdated; snarks and AA changed the tradeoff space completely), and I’ll happily say that I think @saylor’s comments are batshit insane. He seems to be explicitly arguing for a…”

In an interview with financial markets reporter Madison Reidy on Oct. 21, Saylor criticized “crypto-anarchists,” non-regulated entities that do not acknowledge government, taxes, or reporting requirements. He believes these entities increase the risk of digital assets being seized.

Saylor suggested that Bitcoin holders should rely on “too big to fail” banks, which are designed to be custodians of financial assets. His recent comments contradict his previous stance that promoted 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-sized companies prefer to hold their own private keys or use a multi-sig deal instead of trusting 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,”

Saylor said. Blockware noted that Saylor’s comments at that time came three weeks after the collapse of FTX, where users lost billions worth of BTC left on the platform, leading to ongoing legal disputes.

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 August 2024.

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