According to Bitcoin’s $27,355 bull and billionaire internet investor Chamath Palihapitiya, US regulators have starved the cryptocurrency sector to the verge of death. “Crypto is dead in America,” he confidently declared on the All-In podcast on April 22.
Palihapitiya made the remark in response to the news that cryptocurrency exchange Coinbase is considering relocating abroad. He pointed the blame at Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC) in the United States:
“Crypto is no longer alive in America.” I mean, now you have Gensler blaming crypto for the banking crisis — so the US authorities have firmly trained their guns at crypto.”
While Palihapitiya believes that crypto represents a challenge to the “establishment” in the United States, the tech investor does blame the sector: “In fairness to the regulators, [the crypto sector] did push the boundaries more than any other sector of the startup economy.”
He concluded his research by stating that the good actors are now “paying the price” for the terrible work done by FTX and other firms that have harmed the industry’s reputation.
“The bill has finally come due for them,” he added. One of the show’s co-hosts, David Sacks, suggested that the US may be attempting to suffocate cryptocurrency since it threatens the supremacy 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 that they’re cracking down on crypto.”
However, the overall impact will be bad, according to Sacks, who believes that sending crypto companies abroad will be “terrible for American innovation.” Other critics have referred to the situation as “Operation Choke Point 2.0” – a purported coordinated attempt by regulators to prevent banks from holding crypto or giving services to crypto firms.
Palihapitiya was perplexed that Coinbase, a digital asset trading platform that he claims “played by the rules, stood in line,” and “tried to do the right things,” was no closer to regulatory certainty than the now-defunct FTX. “How is that even possible?” Palihapitiya inquired, to which Sacks replied that previous FTX CEO Sam Bankman-Fried “had skills in gaming the system.”
The SEC issued Coinbase a Wells Notice in March, implying that the regulator intends to take legal action against the company for suspected violations of US securities laws.
If a lawsuit is brought, Coinbase’s CEO, Brian Armstrong, has stated that the company is prepared to litigate.