Billionaire venture capitalist Chamath Palihapitiya says a new phase of cleansing is coming to the crypto markets.
In the latest All-In podcast, the serial entrepreneur says one day, lawsuits could be filed against those involved in unfair or immoral token sales, giving much of the industry a bad look.
“Wait until these token sale things get litigated. I mean, the amount of grift by so many of these venture firms running these sketchy deals where they would put in some amount money – this is my understanding of the scam because it was explained to me – you put in a little bit of equity in at some crazy price, and then you get these tokens, and apparently, you can just sell these tokens day one. So what happens is, you price the equity, but it’s meaningless because really what you’re getting is the right to get some amount of tokens, price goes crazy, you sell it and walk away…
You can do these deals where you just rinse and repeat these things. Wait till that gets exposed.”
Palihapitiya also says that regulators might have a field day looking into some of the industry’s infrastructure behind the scenes that may or may not be involved in insider trading.
“If they want to really find the honeypots here, it’s the worst-kept secret in crypto: how much insider trading is going on among the organizations that run the exchanges, and their side pockets that they use to manage liquidity. I mean, this is the biggest thing that’s been happening in crypto.”