According to Bitcoin bull and billionaire tech investor Chamath Palihapitiya, the cryptocurrency sector in the United States has been squeezed out to the brink of death by regulators in that country.
In an episode of the All-In podcast that aired on April 22, he made the audacious claim that “Crypto is dead in America.”
This comment was made by Palihapitiya in reaction to recent reports that the bitcoin exchange Coinbase is mulling over the possibility of relocating its operations overseas. Gary Gensler, the chairman of the United States Securities and Exchange Commission, was the target of his accusation.
“Crypto is dead in the United States of America. I mean, now you even have Gensler blaming the banking crisis on crypto, which means that the authorities in the United States have firmly trained their guns on crypto.
Despite the fact that Palihapitiya suggested that the United States probably sees cryptocurrency as a challenge to its “establishment,” the tech investor did allocate some of the blame to the industry:
“In order to be fair to the regulators, it is important to note that [the cryptocurrency sector] did test the limits of possibility more than any other sector of the startup economy.”
In the final part of his study, he came to the conclusion that the industry’s good actors are now “paying the price” for the poor job done by FTX and other companies, which has had an adverse effect on the industry’s reputation.
“The time has come for them to pay the bill,” he continued.
One of the co-hosts of the show, David Sacks, suggested that the United States government may be trying to stifle cryptocurrency because of the threat that it poses to the supremacy of the United States 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,” you said. “I think it’s probably not a coincidence.”
However, the overall impact will be one that is a net negative, as emphasized by Sacks, who is of the opinion that forcing cryptocurrency companies to offshore locations will be “terrible for American innovation.”
Other critics have referred to the current situation as “Operation Choke Point 2.0,” which is an alleged coordinated effort by regulators to dissuade banks from holding cryptocurrency or from providing services to enterprises that deal in cryptocurrency.
Coinbase was a digital asset trading platform that, according to Palihapitiya, “played by the rules, stood in line,” and “tried to do the right things.” Palihapitiya was perplexed by the concept that Coinbase was no closer to gaining regulatory clarity than the company that is no longer in business, FTX.
“How is even possible,” Palihapitiya questioned. “How is that even possible?” In response, Sacks stated that the previous CEO of FTX, Sam Bankman-Fried, “had skills in gaming the system.”
A Wells notice was sent to Coinbase by the Securities and Exchange Commission (SEC) in March. Such a warning often means that the regulator intends to pursue legal action against the company for alleged violations of U.S. securities laws.
Coinbase CEO Brian Armstrong has stated that the company is prepared to go to court in the event that a lawsuit is brought against the exchange.
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