“Crypto is dead in America,” says tech investor Chamath Palihapitiya.

Technology investor Chamath Palihapitiya, who said two years ago that bitcoin had replaced gold and predicted the digital currency to soar to $200,000, has a much more cautious view of cryptocurrencies these days.

“Crypto is dead in America,” Palihapitiya said. The final episode of the All-In podcast.

Palihapitiya blamed the demise of the cryptocurrency largely on regulators, who have become more aggressive in their pursuit of bad actors in the industry. The Chairman of the Securities and Exchange Commission, Gary Gensler, said that cryptocurrency trading platforms must comply with strict US securities laws.

Responding to questions put to lawmakers recently, Gensler linked the Silicon Valley bank collapse to the cryptocurrency industry.

“Even Gensler blamed the banking crisis on cryptocurrencies,” Palihapitiya said. “The US authorities have firmly turned their weapons on cryptocurrencies.”

The Securities and Exchange Commission has stepped up its enforcement of the cryptocurrency industry, affecting companies and projects that the regulator claims are selling unregistered securities.

In February, the agency proposed rules that would change which crypto companies can hold customers’ assets, and in March, the SEC issued cryptocurrency exchange Coinbase a notice from Wells, warning the company that it had identified potential violations of US securities law. (Notification to Wells is usually one of the last steps before the financial regulator issues the fee.) last weekThe Securities and Exchange Commission (SEC) has charged crypto-asset trading platform Bittrex and its former CEO with operating an unregistered exchange.

Coinbase CEO Brian Armstrong told CNBC that his company is preparing for a years-long court battle with the commission, and is also considering moving out of the United States if it doesn’t get improved regulatory clarity. while, Bittrex has already announced It will end US operations precisely because of “ongoing regulatory uncertainty”.

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Referring to cryptocurrency firms, Palihapitiya said they were “probably the most threatening to the establishment.” “And it was they who pushed the boundaries more than any other sector of the startup economy, in fairness to regulators.”

“Now they are paying the price for it,” he said. “The bill they owe.”

Gensler faced similar criticism from House Republicans over the agency’s crackdown on cryptocurrency platforms during four hours of congressional testimony last week.

House Financial Services Committee Chairman Rep. Patrick McHenry, RN.C. Regulations through enforcement are neither sufficient nor sustainable. “You’re penalizing digital asset companies for allegedly not complying with the law when they didn’t know it would apply to them.”

McHenry said the SEC’s approach was “driving innovation abroad and endangering American competitiveness.”

Gensler defended the agency’s actions.

“We have a clear regulatory framework that has been in place over 90 years,” he said, adding that exchanges are “generally non-compliant, and they should.”

Bitcoin, the largest cryptocurrency, reached a record high of around $69,000 in November 2021, when the Federal Reserve’s benchmark interest rate was near zero and investors were flocking to risk. The market changed hastily in the past year, as the Federal Reserve began steadily raising interest rates to fight inflation.

In early 2021, Palihapitiya on CNBC predicted that the bitcoin price would rise from $39,000 at the time to $100,000 and then to $200,000.

“In what period, I don’t know,” he said. “Five years, 10 years, but there it will go. The reason is that every time you see all this stuff happen, it just reminds you, wow, our leaders are not as trustworthy and dependable as they used to be.”

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Later in 2021, just before the peak, he said that bitcoin had “effectively replaced gold.”

Bitcoin is currently trading at just over $27,300, down 60% from its all-time high.

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