Venture capitalist Chamath Palihapitiya said: “Crypto is dead in America.”
His bleak assessment of the US crypto market came during an interview with the All-In Podcast, in which Palihapitiya blamed hostile regulators.
Operation Choke Point 2.0
Since the beginning of the year, multiple exchanges and crypto projects have received enforcement actions from US regulators, including Coinbase, which, on March 22, received a Notice from Wells reporting pending actions on violations of values.
The frequency of execution actions, including against Binance, KuCoin, and Kraken, had raised suspicions that the crypto industry was under coordinated attack.
Many in the community, including Anthony Pompliano, Nic Carter, and Caitlin Long, concluded that the attack took the form not only of regulatory compliance action but also through debanking.
Under an Operation Choke Point 2.0 scenario, observers noted that crypto firms are being sidelined by the loss of banking access.
Similarly, cryptocurrency-friendly banks have come under fire, including Custodia Bank, which was denied a Fed master account and rejected for membership in the Federal Reserve System. Long inferred that the decisions were made as part of an anti-crypto agenda.
Crypto is dead at the hands of US regulators.
Commenting on the state of the US regulatory landscape, Palihapitiya said: “US authorities have firmly pointed their guns at cryptocurrencies.”
The former Facebook executive believes this is motivated by the threat of cryptocurrencies to the established order. But at the same time, he admitted that the crypto industry “pushed the limits,” which led to the regulatory response we see today.
“To be fair to the regulators, they pushed the envelope more than any other sector in the emerging economy. And now they are paying the price for that.”
VC at Craft Ventures David Sacks said that while some crypto firms are guilty of “shady stuff,” most would agree that Coinbase, as the gold standard in compliance, didn’t fall into that camp, making the application of the law against you is baffling.
Sacks noted that Coinbase had asked numerous times for clarity in adhering to the rules. But the lack of response shows that the authorities are not seeking dialogue, only a ban.
“So I think Chamath is right that they are effectively banning cryptocurrencies in the United States.”
Palihapitiya said it is ironic that FTX was the closest to “getting a license” despite its many failures as a supported exchange.
This post Hostile US Regulators Have Guns Steadily Pointed at Crypto
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