According to tech investor Chamath Palihapitiya, who previously forecasted that the price of one bitcoin would reach $200,000, "crypto is dead in America," reported first by CNBC.
Palihapitiya blamed regulatory crackdowns as the main cause of the collapse of cryptocurrencies.
SAN FRANCISCO, CA - OCTOBER 19: Founder/CEO of Social Capital, Chamath Palihapitiya, speaks onstage during "The State of the Valley: Where’s the Juice?" at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 19, 2016 in San Francisco, California.
Targeting Cryptocurrency
He criticized the US government for targeting cryptocurrency, claiming that the SEC and Chairman Gary Gensler, in particular, have been zealously going after bad actors in the sector.
With more companies and projects being accused of marketing unregistered securities, the SEC has increased enforcement in the cryptocurrency sector.
Palihapitiya's remarks come after the SEC recently filed charges against Bittrex, a platform for trading crypto assets, and its former CEO for allegedly running an unlicensed exchange.
In March, the SEC sent a Wells notice to cryptocurrency exchange Coinbase alerting it to potential securities law breaches.
Brian Armstrong, the CEO of Coinbase, stated that his organization is getting ready for a protracted legal battle with the SEC and may leave the United States if more regulatory clarity is not obtained.
Bittrex has already stated that it will cease operations in the US owing to "continued regulatory uncertainty."
Palihapitiya acknowledged that out of all the startup industries, crypto businesses were probably the most disruptive and the most dangerous to the status quo.
In an episode of the All-In podcast, he said, "Now they're paying the price for that." "The bill has come due for them."
Over time, Palihapitiya's views on cryptocurrency have changed. In an earlier prediction, he stated that Bitcoin would someday surpass $100,000 and take the place of gold as a store of value.
But in 2021, as the Fed started hiking interest rates to combat inflation, the market underwent a transformation. Currently, the price of one bitcoin is slightly over $27,300, down 60% from its peak of approximately $69,000.
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Coinbase Sues the SEC
In related news, Coinbase is suing the SEC as it seeks "regulatory clarity" on the numerous regulations and restrictions in the crypto industry.
In July 2022, Coinbase petitioned the SEC, asking for clarification on whether current securities rule-making procedures could be applied to the crypto world. Coinbase also urged the SEC to "propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods."
According to Coinbase, the SEC has not responded to its petition, putting both the business and the larger crypto sector in legal limbo.
Hence, Coinbase has taken legal action by suing the SEC to force the regulator to respond.
In a blog post, the company stressed the importance of regulatory clarity in the quickly changing crypto market, arguing that a lack of clear regulations has stifled innovation and created confusion.
"Coinbase does not take any litigation lightly, especially when it relates to one of our regulators. Regulatory clarity is overdue for our industry. Yet Coinbase and other crypto companies are facing potential regulatory enforcement actions from the SEC, even though we have not been told how the SEC believes the law applies to our business," said Paul Grewal, Chief Legal Officer of Coinbase.
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