Cryptocurrency is dead in America, according to tech billionaire Chamath Palihapitiya

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By Degen Lipsa

The cryptocurrency industry has been effectively “choked out” by US regulators, according to billionaire tech investor Chamath Palihapitiya, who also said that crypto is “dead in America.” In a podcast episode of All-In, he responded to reports that bitcoin exchange Coinbase was thinking about moving overseas. Palihapitiya attributed the predicament to Gary Gensler, the chairman of the US Securities Exchange Commission, and claimed that authorities had “firmly pointed their guns at cryptocurrency.” However, he did place some of the blame on the industry, claiming that it had “pushed the boundaries more than any other sector of the startup economy”.

Chamath Palihapitiya said that cryptocurrency is "dead in America."
Cryptocurrency bull Chamath Palihapitiya. Image Courtesy : Theprint

According to a report by billionaire internet investor and Bitcoin (BTC) bull Chamath Palihapitiya, American policymakers have strangled the cryptocurrency industry to death. Crypto is dead in America, asserted Palihapitiya in an episode of the All-In podcast from April 22. In response to the report that bitcoin exchange Coinbase is now mulling a relocation overseas, he made his comment. He specifically named Gary Gensler as the culprit, saying that “now that Gensler is even blaming the banking crisis on cryptocurrency, the United States authorities have firmly pointed their guns at crypto.”

Although the tech investor acknowledged that the U.S. undoubtedly sees cryptocurrencies as a threat to its “establishment,” Palihapitiya did point out several problems with the industry. To be fair to the regulators, he claimed that the crypto industry “did push the boundaries more than any other sector of the startup economy.” He came to the conclusion that the good actors are currently “paying the price” for FTX’s and other companies’ subpar performance, which has harmed the reputation of the sector.

One of the co-hosts of the programme, David Sacks, said that the United States might be trying to suppress cryptocurrency because it could threaten the supremacy of the dollar. He suggested that “you’re probably not seeing all these concerns about de-dollarization at the same time they’re cracking down on crypto.” Sacks, though, thinks that moving cryptocurrency businesses overseas will be “terrible for American innovation.”

Some observers have referred to the current situation as “Operation Choke Point 2.0” – a purported coordinated effort by regulators to dissuade banks from keeping cryptocurrency or offering services to cryptocurrency businesses. Palihapitiya was perplexed by the idea that Coinbase, a platform for trading digital assets, was no closer to regulatory certainty than the now-defunct FTX despite having “played by the rules, stood in line,” and “tried to do the right things,” according to Palihapitiya. “How is even that possible?” Prior to Sacks’ response, Palihapitiya questioned whether former FTX CEO Sam Bankman-Fried “had skills in gaming the system.”

Regarding Coinbase’s proposed Lend product, the SEC sent the company a Wells Notice in March, which normally means the regulator intends to sue the business. The SEC has come under fire from Coinbase CEO Brian Armstrong, who claims that the organisation won’t give specific instructions on what qualifies as a security in the world of digital assets. Armstrong has said that the SEC acts like “pickleball referees in a soccer match.”

Many people in the crypto community are irritated by the situation and unsure of the direction the sector will take in the United States. According to Palihapitiya, “Crypto is dead in America.” Worldwide, the business is still alive, and many nations are warmly accepting cryptocurrency. The future of cryptocurrency in the United States is still uncertain, but it appears that there are several challenges the sector must currently overcome.

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