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Is crypto in America dead? According to early crypto investor and venture capitalist Chamath Palihapitiya, the answer is a resounding “yes.”
Chamath Palihapitiya Doesn’t Think Crypto Has a Future in America
During a recent podcast interview, Palihapitiya mentioned that U.S. financial agencies like the Securities and Exchange Commission (SEC) are going after companies like Coinbase, and that they’re not likely to stop until the entire crypto arena is finished and gone.
He took issue with men like Gary Gensler – the current head of the SEC – who are blaming the crypto industry for the present banking crisis we’re seeing in America, and he thinks this is likely to get in the way of further innovation. During the interview, Palihapitiya stated:
Crypto is dead in America. So, the United States authorities have firmly pointed their guns at crypto.
The attacks on crypto were ultimately ramped up last November when leading digital currency exchange FTX fell into a sorry and twisted state of bankruptcy. From there, many allegations arose claiming Sam Bankman-Fried – the man behind the company – took user funds and paid off loans with them or invested in Bahamian luxury real estate. He’s now awaiting trial at his parents’ California home.
Palihapitiya is very disappointed in that it appears many companies cannot escape the wrath of agencies such as the SEC no matter how hard they try to play by the rules. He again referred to Coinbase when making his point, saying:
Coinbase played by the rules, stood in line, [and] tried to do the right things. It seems that every step along the way, everything from board composition to executive composition to how they try to interact with the regulators, yet they were probably the furthest away from getting a license. The one that came the closest was the one that was the most fraudulent, which is FTX. How is that even possible? [Crypto companies are] probably the ones that were the most threatening to the establishment, and they were the ones that, in fairness to the regulators, did push the boundaries more than any other sector of the startup economy. So now, they’re paying the price for that. The bill has come due for them.
Going to Bermuda?
Not long ago, Brian Armstrong – the head of Coinbase – said he’s exploring taking the firm to Bermuda or other outside territories unless the U.S. can take a clearer stance on crypto regulation. He mentioned:
Anything is on the table, including relocating or whatever is necessary. I think the U.S. has the potential to be an important market for crypto, but right now, we are not seeing that regulatory clarity that we need. I think in a number of years, if we don’t see that regulatory clarity emerge in the U.S., we may have to consider investing more elsewhere in the world.
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