Buterin refutes claims on Ethereum Layer-2 fund security risks

Ethereum (CRYPTO:ETH) co-founder Vitalik Buterin has refuted claims that Layer-2 solutions could unilaterally seize users' funds, addressing recent concerns about the security of these scaling solutions.

His response followed discussions on the social media platform X (formerly Twitter).

On August 31, Justin Bons, founder and CIO of Cyber Capital, criticised Ethereum Layer-2 networks for their centralised nature, suggesting they could pose a risk of fund theft.

Bons argued that the design of these solutions contradicts the cypherpunk ideals they claim to uphold.

Mert Mumtaz, co-founder and CEO of Helius, echoed this view, describing the technical capabilities of major Layer-2 solutions as concerning.

Mumtaz's comments intensified the debate over the safety and decentralisation of these platforms.

Buterin countered these accusations by emphasising the governance structure of Ethereum Layer-2 solutions.

He noted that these systems require a high level of consensus, which mitigates the risk of unilateral actions.

Decisions regarding governance require approval from a security council with at least a 75% voting threshold.

Additionally, at least 26% of council members must be independent of the company behind the Layer-2 solution.

Buterin highlighted that both Arbitrum and Optimism, prominent Layer-2 solutions, adhere to these governance requirements, making fund theft unlikely.

He clarified that these mechanisms are designed to prevent any single entity from having unilateral control over user funds.

In a related development, Buterin addressed concerns about his recent Ethereum sales.

He explained that these transactions are intended to fund valuable projects and charitable causes, rather than for personal profit.

Some proceeds have supported biomedical research and development.

Despite these explanations, skepticism persists within the crypto community regarding the frequency of Buterin's ETH transfers.

Last month, Buterin moved 800 ETH to a multisig wallet and swapped a portion for USDC (CRYPTO:USDC).

However, he continues to hold a substantial amount of Ethereum, valued at approximately $592 million according to the Arkham Intelligence dashboard.

At the time of reporting, the Ethereum price was $2,445.65.