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According to Bitcoin (BTC) advocate and billionaire technology investor Chamath Palihapitiya, regulators in the United States have effectively suffocated the cryptocurrency industry to the brink of extinction.
“Crypto is dead in America,” he asserted during an April 22 episode of the All-In podcast.
Palihapitiya made this remark following reports that cryptocurrency exchange Coinbase is contemplating relocating its operations overseas. He directed criticism towards Gary Gensler, the Chair of the U.S. Securities Exchange Commission (SEC):
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“Crypto is dead in America. I mean now you have Gensler even blaming the banking crisis on crypto — so the United States authorities have firmly pointed their guns at crypto.”
While Palihapitiya suggested that the U.S. likely perceives crypto as a challenge to its “establishment,” he also acknowledged some responsibility on the part of the industry:
“In fairness to the regulators, [the crypto sector] did push the boundaries more than any other sector of the startup economy.”
He concluded his remarks by stating that the responsible participants are now “paying the price” for the misconduct of FTX and other entities that have tarnished the industry’s reputation.
“The bill has come due for them,” he remarked.
David Sacks, one of the co-hosts of the show, suggested that the U.S. might be attempting to suppress crypto due to its potential to undermine the supremacy of the U.S. 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.”
However, Sacks implied that the overall effect would be detrimental, expressing the belief that driving crypto firms offshore would be “terrible for American innovation.”
Related: Coinbase CEO on its Wells notice: SEC is like soccer referees in a game of pickleball
Other analysts have characterized the situation as “Operation Choke Point 2.0” — an alleged coordinated initiative by regulators to deter banks from holding crypto or offering services to crypto businesses.
Palihapitiya expressed confusion over the idea that Coinbase, a digital asset trading platform he claims has “played by the rules, stood in line” and “tried to do the right things,” is no closer to obtaining regulatory clarity than the now-defunct FTX.
“How is that even possible,” Palihapitiya questioned, to which Sacks responded that former FTX leader Sam Bankman-Fried “had skills in gaming the system.”
In March, the SEC issued a Wells Notice to Coinbase — which typically indicates the regulator intends to take legal action against the company for possible breaches of U.S. securities laws.
If a lawsuit is initiated, Brian Armstrong, the CEO of Coinbase, stated that the company will be prepared to litigate.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
