According to Bitcoin (BTC) bull and billionaire tech investor Chamath Palihapitiya, regulators in the United States have choked the cryptocurrency sector to the death.
“Crypto is dead in America,” he boldly asserted on an April 22 episode of All-In Podcast.
Palihapitiya’s comment came in response to news that cryptocurrency exchange Coinbase is now considering a move abroad. He pointed the finger at Gary Gensler, chairman of the US Securities Exchange Commission (SEC):
“Crypto is dead in America. I mean, now even Gensler has blamed crypto for the banking crisis – so the United States authorities have their guns firmly on crypto.”
While Palihapitiya said the US is likely to view crypto as a threat to its “establishment,” the tech investor credited the sector with some flaws:
“To be fair to regulators, [the crypto sector] has pushed the boundaries more than any other sector of the startup economy.”
He rounded out his analysis by concluding that the good players are now “paying the price” for the poor work done by FTX and other firms that have tarnished the industry’s reputation.
“The bill is due for them,” he added.
David Sacks, one of the show’s co-hosts, said the US may try to choke crypto because it could hurt the US dollar’s dominance:
“I think it’s probably no coincidence that you’re seeing all these de-dollarization concerns at the same time they’re cracking down on crypto.”
But the overall impact will be net negative, implied Sacks, who believes that offshore crypto companies will be “terrible for American innovation.”
Related: Coinbase CEO on his Wells Announcement: SEC is like a soccer referee in a pickleball game
Other commenters have described the issue at hand as “Operation Choke Point 2.0” — a supposedly orchestrated effort by regulators to stop banks from holding crypto or providing services to crypto companies.
Palihapitiya was stunned at the idea that Coinbase, a digital asset trading platform that he says has “followed the rules, queued up” and “tried to do the right things,” couldn’t be any closer to the regulatory clarity than the now bankrupt FTX.
“How is that even possible,” Palihapitiya asked, before Sacks replied that former FTX boss Sam Bankman-Fried “had skills to play the system.”
In March, the SEC issued a Wells Notice to Coinbase — typically implying that the regulator plans to take legal action against the company for possible violations of U.S. securities laws.
If a lawsuit is filed, Coinbase chief executive Brian Armstrong said it will be ready to sue.
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