US crypto crackdown is ‘upside-down’ by ignoring AI threat: Mike Novogratz US crypto crackdown is ‘upside-down’ by ignoring AI threat: Mike Novogratz

US crypto crackdown is ‘upside-down’ by ignoring AI threat: Mike Novogratz

Mike Novogratz questions the US government's crackdown on crypto while overlooking the potential dangers of AI.

US crypto crackdown is ‘upside-down’ by ignoring AI threat: Mike Novogratz

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

American investor and CEO of Galaxy Digital, Mike Novogratz, is shocked that the U.S. government is cracking down on crypto โ€” yet overlooks AI’s potential threat.

Crypto crackdown

Since the beginning of the year, U.S. regulatory agencies have ramped up their enforcement actions against crypto companies. Alongside several banking anomalies, some individuals have concluded that a coordinated attack by authorities is underway.

For example, Signature Bank board member Barney Frank said his firm was sufficiently liquid and questioned why the New York State Department of Financial Services (NYDFS) seized the bank on March 12.

The issue was made all the more suspicious when the NYDFS stated buyers of the bank must not reinstate crypto activities after taking over.

Responding to the claims, the NYDFS clarified that its decision to seize Signature Bank was unrelated to its involvement in the crypto industry. Instead, the move was made to address concerns regarding risk management.

Nonetheless, multiple enforcement actions have since been filed, including the SEC suing Coinbase and, most recently, the CFTC accusing Binance of operating an illegal exchange.

Anthony Pompliano recently described Operation Choke Point 2.0 as a program that enforces political ideologies without adhering to relevant laws and due process. The process of de-banking can effectively marginalize entire industries.

AI – Pandora’s box in the making?

ChatGPT’s ability to enhance productivity has generated significant attention and interest recently. Its diverse applications across multiple industries are being hailed as a significant technological advancement.

However, more than 1,000 AI insiders โ€” including experts and researchers โ€” joined forces recently in calling for a pause on its development. The open letter โ€” signed by Elon Musk and Steve Wozniak among other prominent figures โ€” raised concerns about an AI arms race that could result in unintended consequences.

“Recent months have seen AI labs locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one โ€“ not even their creators โ€“ can understand, predict, or reliably control.”

Novogratz contrasted this situation with the ongoing war on crypto, saying the U.S. government has got things “completely upside-down.”

“When I think about AI, it shocks me that we’re talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government’s got it completely upside-down.”

According to the Galaxy Digital CEO, AI technology presents significant concerns regarding producing convincing deep fakes.

With that, Novogratz sees an opportunity for crypto and blockchain to counter deep fakes by providing immutable verification solutions.

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