“Crypto is dead in America”: Tech billionaire Chamath Palihapitiya
Regulators in the US have strangled the cryptocurrency sector to death, according to Bitcoin (BTC) bull and billionaire tech investor Chamath Palihapitiya.
“Crypto is dead in America,” he boldly claimed on an April 22 episode All-In podcast.
Palihapitiya’s comment came in response to the news that cryptocurrency exchange Coinbase is now considering moving offshore. He pointed the finger at Gary Gensler, the head of the US Securities Exchange Commission:
“Crypto is dead in America. I mean now you have Gensler even blaming the banking crisis on crypto ̵[ads1]1; so the US government has definitely turned its gun on crypto.”
While Palihapitiya said the U.S. likely views crypto as a threat to its “establishment,” however, the tech investor attributed some fault to the sector:
“In fairness to the regulators, [the crypto sector] pushed the boundaries more than any other sector of the start-up economy.”
He rounded off 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 affected the industry’s reputation.
“The bill has come to pay for them,” he added.
David Sacks, one of the show’s co-hosts, said the US may be trying to throttle crypto because it could eat into the dominance of the US dollar:
“I think it’s probably not a coincidence that you’re seeing all these concerns about de-dollarization at the same time they’re cracking down on crypto.”
But the overall effect will be a net negative one, suggested Sacks, who is of the opinion that pushing crypto companies offshore would be “terrible for American innovation.”
Related: Coinbase CEO on Wells warning: SEC is like soccer referees in a game of pickleball
Other commentators have described the issue as “Operation Choke Point 2.0” – an allegedly orchestrated effort by regulators to discourage banks from holding crypto or providing services to crypto companies.
Palihapitiya was baffled by the notion that Coinbase — a digital asset trading platform that he says had “played by the rules, stood in line” and “tried to do the right things” — was no closer to regulatory clarity than the now-bankrupt FTX.
“How is that even possible,” asked Palihapitiya. Sacks responded that former FTX CEO Sam Bankman-Fried “had the skills to game the system.”
In March, the SEC issued Coinbase a Wells notice — which typically means the regulator plans to pursue legal action against the firm for potential violations of US securities laws.
If a lawsuit is filed, Coinbase CEO Brian Armstrong says the exchange will be ready to sue.
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