Billionaire tech investor and Bitcoin enthusiast, Chamath Palihapitiya, declared the US cryptocurrency sector dead during the April 22 episode of the All-In podcast. This comes as cryptocurrency exchange Coinbase contemplates a move offshore due to regulatory pressures.
Palihapitiya criticized the US Securities Exchange Commission (SEC) chair, Gary Gensler, accusing US authorities of targeting the crypto industry. He acknowledged that the crypto sector has pushed boundaries more than other startups, which could be one reason for the SEC’s attention. Palihapitiya believes that good actors in the industry are now suffering due to the actions of firms like FTX, which have tarnished the industry’s reputation.
David Sacks, a co-host of the podcast, suggested that the crackdown on crypto might be linked to concerns about de-dollarization and the potential threat to the US dollar’s dominance. He argued that driving crypto companies offshore would ultimately harm American innovation.
The regulatory backlash against the crypto industry has been compared to “Operation Choke Point 2.0,” an alleged effort by regulators to discourage banks from holding crypto assets or providing services to crypto companies.
Palihapitiya expressed frustration over the lack of regulatory clarity for Coinbase, a platform that has tried to follow the rules and regulations. In March, the SEC issued Coinbase a Wells notice, indicating potential legal action against the company for possible violations of US securities laws. Coinbase CEO, Brian Armstrong, has stated that the exchange is prepared to litigate if necessary.