Billionaire tech investor Chamath Palihapitiya has claimed that regulators in the United States have stifled the crypto sector to the point of death. In an episode of the All-In podcast, Palihapitiya responded to the news of Coinbase’s consideration of a move offshore, stating that “Crypto is dead in America.” He pointed fingers at Gary Gensler, the chair of the U.S. Securities Exchange Commission (SEC), and claimed:
“Crypto is dead in America. I mean now you have Gensler even blaming the banking crisis on crypto — so the United States authorities have firmly pointed their guns at crypto.”
Palihapitiya also attributed some fault to the sector, which he claimed had pushed the boundaries more than any other startup sector. He concluded by noting that good actors are now paying the price for the bad work done by firms that have impacted the reputation of the industry.
Palihapitiya’s comments have been met with criticism and concerns that pushing crypto companies offshore will be “terrible for American innovation.” Others have described the issue at hand as “Operation Choke Point 2.0,” which is an alleged orchestrated effort by regulators to discourage banks from holding crypto or providing services to crypto companies. Despite this, Palihapitiya was surprised that Coinbase was no closer to receiving regulatory clarity than the now-bankrupt FTX.
In March, the SEC issued Coinbase a Wells notice, indicating the regulator’s plan to pursue legal action against the firm for potential violations of U.S. securities laws. Coinbase CEO Brian Armstrong stated that the exchange would be ready to litigate if a lawsuit is filed.