Venture capitalist Chamath Palihapitiya declared that “crypto is dead in America” due to hostile regulatory environment that has led to multiple legal actions against crypto companies.
Poor Regulatory Climate Hitting the Crypto Industry
Chamath Palihapitiya expressed his negative opinion on the present state of the crypto industry in America on a recent episode of the All-In Podcast. The former Facebook executive blamed regulators’ marked hostility against virtual currency as the cause of the digital asset’s poor reception in the country. He assertively stated, “The United States authorities have firmly pointed their guns at crypto.”
There have been an abundance of regulatory enforcement actions carried out against multiple crypto exchanges and projects since the beginning of this year. However, enforcement against companies such as Coinbase, KuCoin and Kraken have raised suspicions of possible coordinated attacks. In most cases, these attacks are not limited to just regulatory enforcement actions but also de-banking activities that some experts perceive as an “Operation Choke Point 2.0.”
Due to the loss of banking access, crypto companies are gradually being marginalized, and crypto-friendly banks such as Colorado’s Custodial Bank are finding it tough to comply with banking regulations regarding membership into Federal Reserve systems. Overall, crypto industry players accuse regulators of an anti-crypto agenda.
Regulators Failing to Provide Clarity
While David Sacks, VC at Craft Ventures admits that some crypto firms carried out “shady things,” such claims do not apply to industry giant Coinbase that is considered the gold standard in terms of performing due diligence for compliance. Reports show that Coinbase had already been seeking regulatory clarity for directions on how to slip straight into compliance. Observers place the lack of a response from regulators, in essence, blocking crypto adoption as regulators appear to have prohibitive functions from regulators.
Palihapitiya accuses American regulators on “effectively banning crypto in the United States.” Ironically, regulatory clarifications- the one missing for Coinbase- that trading platform FTX is closest to getting appear to emanate from less-than-compliant exchanges.
[h/t Samuel Wan]