Chamath Palihapitiya, the host of the widely-known podcast ‘All In’ and a seasoned venture capitalist with investments in successful companies like Slack and Yammer, has been a long-standing supporter of fledgling ventures and movements. For years, he has championed Bitcoin and its rise to $200k in the world of venture capitalists, all while having previously worked as a senior executive at Facebook.
Regulators Stifled Growth
As reported by CNBC, Palihapitiya expressed disappointment in the current state of the crypto industry, with the future of crypto seemingly lying elsewhere due in large part to the actions being taken by regulators. ‘Crypto is dead in America. You had Gensler even blaming the banking crisis on crypto. The United States authorities have firmly pointed their guns at crypto (companies). They were 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,’ Palihapitiya shared with CNBC.
Still a Believer
Despite expressing disappointment, Palihapitiya has emphasized that he still fervently believes in Bitcoin and cryptocurrencies as a whole. However, he suggests that future growth of the crypto industry may lie elsewhere, whether it be in Europe, Asia, or around the world. This opinion has also been expressed by Republican figureheads, such as Financial Services Committee Chairman Patrick McHenry, who voiced his concerns with SEC Chairman Gary Gensler during a testimony before Congress.
‘Regulation by enforcement is not sufficient nor sustainable. You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them, (…) driving innovation overseas and endangering American competitiveness.’ McHenry urges regulators to take a different approach, mentioning that enforcing regulations will put crypto firms at a disadvantage, allowing firms in other parts of the world to take the lead in innovation in the crypto market.
Gensler, on the other hand, has expressed his reluctance to change his approach, instead preferring to apply for additional funding in order to control ‘the wild west that is crypto.’
Consequences to the SEC’s Actions
Regulatory actions have already started to take a toll on the industry, with firms such as Coinbase and Bittrex reportedly making contingency plans to move abroad. Despite these companies – along with others in the industry – expressing their willingness to comply and join the larger world of financial services as equals, the absence of well-defined laws pertaining to cryptocurrency makes total compliance difficult to achieve.